Insider Sellers Might Regret Selling Indivior Shares at a Lower Price Than Current Market Value

Indivior PLC's (LON:INDV) stock price has dropped 20% in the previous week, but insiders who sold US$7.9m in stock over the past year have had less luck. Given that the average selling price of US$16.87 is still lower than the current share price, insiders would probably have been better off keeping their shares.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Indivior

Indivior Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chief Scientific Officer, Christian Heidbreder, for UK£2.3m worth of shares, at about UK£17.27 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of UK£7.27. So it may not tell us anything about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid UK£369k for 33.26k shares. But they sold 468.40k shares for UK£7.9m. In total, Indivior insiders sold more than they bought over the last year. The sellers received a price of around US$16.87, on average. It is certainly not great to see that insiders have sold shares in the company. But we note that the selling, on average, was at well above the recently traded price of UK£7.27. You can see the insider transactions (by companies and 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!

I will like Indivior better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Indivior Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Indivior. Overall, eight insiders shelled out UK£211k for shares in the company -- and none sold. That shows some optimism about the company's future.

Does Indivior Boast High Insider Ownership?

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Indivior insiders own 0.8% of the company, worth about UK£7.3m. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Indivior Tell Us?

The recent insider purchases are heartening. But we can't say the same for the transactions over the last 12 months. We're not thrilled with the relatively low insider ownership and the longer term transaction history. But we like the recent purchasing. While it's good to be aware of 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. For example, Indivior has 3 warning signs (and 2 which don't sit too well with us) we think you should know about.

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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.