Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Activision Blizzard, Inc. (NASDAQ:ATVI).
What Is Insider Selling?
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 don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Activision Blizzard
Over the last year, we can see that the biggest insider purchase was by Independent Director Peter Nolan for US$4.3m worth of shares, at about US$42.95 per share. That means that an insider was happy to buy shares at around the current price of US$46.02. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it’s a good sign on balance, but keep in mind they may no longer see value. Happily, the Activision Blizzard insiders decided to buy shares at close to current prices.
In the last twelve months insiders purchased 100k shares for US$4.3m. But they sold 7698 for US$532k. Overall, Activision Blizzard insiders were net buyers last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Activision Blizzard is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Activision Blizzard Have Bought Stock Recently
Over the last quarter, Activision Blizzard insiders have spent a meaningful amount on shares. Peter Nolan spent US$4.3m on stock, and there wasn’t any selling. That shows some optimism about the company’s future.
Does Activision Blizzard Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company 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. Activision Blizzard insiders own about US$392m worth of shares (which is 1.1% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Activision Blizzard Insiders?
It’s certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Activision Blizzard. One for the watchlist, at least! Of course, the future is what matters most. So if you are interested in Activision Blizzard, you should check out this free report on analyst forecasts for the company.
But note: Activision Blizzard may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.