Did Edwards Lifesciences Corporation (NYSE:EW) Insiders Sell Shares?

By
Simply Wall St
Published
November 11, 2020
NYSE:EW

We often see insiders buying up shares in companies that perform well over the long term. 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 Edwards Lifesciences Corporation (NYSE:EW).

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 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'.

View our latest analysis for Edwards Lifesciences

Edwards Lifesciences Insider Transactions Over The Last Year

Notably, that recent sale by Corporate Vice President of Strategy & Corporate Development Donald Bobo was not the only time they sold Edwards Lifesciences shares this year. They previously made an even bigger sale of -US$927k worth of shares at a price of US$77.28 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$81.21. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 5.6% of Donald Bobo's stake.

Donald Bobo ditched 19.77k shares over the year. The average price per share was US$79.91. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NYSE:EW Insider Trading Volume November 11th 2020

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders at Edwards Lifesciences Have Sold Stock Recently

The last quarter saw substantial insider selling of Edwards Lifesciences shares. Specifically, Corporate Vice President of Strategy & Corporate Development Donald Bobo ditched US$653k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Edwards Lifesciences insiders own 0.7% of the company, worth about US$391m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Edwards Lifesciences Tell Us?

An insider sold Edwards Lifesciences shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, Edwards Lifesciences makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 2 warning signs for Edwards Lifesciences and we suggest you have a look.

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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