Even if it’s not a huge purchase, we think it was good to see that Steven Meyer, the Independent Director of Akorn, Inc. (NASDAQ:AKRX) recently shelled out US$52k to buy stock, at US$2.60 per share. That purchase might not be huge but it did increase their holding by 15.2%.
The Last 12 Months Of Insider Transactions At Akorn
In the last twelve months, the biggest single purchase by an insider was when Chairman of the Board Alan Weinstein bought US$199k worth of shares at a price of US$3.97 per share. That means that even when the share price was higher than US$2.71 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months insiders paid US$502k for 130k shares purchased. In the last twelve months Akorn insiders were buying shares, but not selling. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Insider Ownership of Akorn
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It appears that Akorn insiders own 8.3% of the company, worth about US$28m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Akorn Tell Us?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Akorn we think they are probably pretty confident of a bright future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Akorn.
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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.
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