It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Avid Bioservices, Inc. (NASDAQ:CDMO).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.
The Last 12 Months Of Insider Transactions At Avid Bioservices
In the last twelve months, the biggest single purchase by an insider was when Interim President Richard Hancock bought US$51k worth of shares at a price of US$5.10 per share. We do like to see buying, but this purchase was made at well below the current price of US$7.28. Because the shares were purchased at a lower price, this particular buy doesn’t tell us much about how insiders feel about the current share price.
While Avid Bioservices insiders bought shares last year, they didn’t sell. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 7.7% of Avid Bioservices shares, worth about US$31m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Avid Bioservices Tell Us?
The fact that there have been no Avid Bioservices insider transactions recently certainly doesn’t bother us. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Avid Bioservices and we see no evidence to suggest they are worried about the future. Of course, the future is what matters most. So if you are interested in Avid Bioservices, you should check out this free report on analyst forecasts for the company.
But note: Avid Bioservices may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.