We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Quest Diagnostics Incorporated (NYSE:DGX), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Quest Diagnostics Insider Transactions Over The Last Year
The Director, Jeffrey Leiden, made the biggest insider sale in the last 12 months. That single transaction was for US$174k worth of shares at a price of US$106 each. That means that an insider was selling shares at around the current price of US$89.95. While we don’t usually like to see insider selling, it’s more concerning if the sales take price at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Jeffrey Leiden was the only individual insider to sell over the last year.
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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Quest Diagnostics insiders own about US$50m worth of shares. That equates to 0.4% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Quest Diagnostics Tell Us?
The fact that there have been no Quest Diagnostics insider transactions recently certainly doesn’t bother us. Our analysis of Quest Diagnostics insider transactions leaves us cautious. But it’s good to see that insiders own shares in the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Quest Diagnostics.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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