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 before you buy or sell Abcam plc (LON:ABC), you may well want to know whether insiders have been buying or selling.
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, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
The Last 12 Months Of Insider Transactions At Abcam
In the last twelve months, the biggest single sale by an insider was when the insider, Jonathan Milner, sold UK£16m worth of shares at a price of UK£14.12 per share. That means that an insider was selling shares at around the current price of UK£14.10. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). The only individual insider seller over the last year was Jonathan Milner.
In the last twelve months insiders purchased 8.33k shares for UK£104k. But insiders sold 1.10m shares worth UK£16m. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Abcam Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Abcam. Overall, five insiders shelled out UK£104k for shares in the company -- and none sold. That shows some optimism about the company's future.
Insider Ownership of Abcam
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Abcam insiders own 8.2% of the company, worth about UK£263m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Abcam Insiders?
It's certainly positive to see the recent insider purchases. However, the longer term transactions are not so encouraging. The recent buying by some insiders , along with high insider ownership, suggest that Abcam insiders are fairly aligned, and optimistic. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 3 warning signs with Abcam and understanding them should be part of your investment process.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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