Some AbCellera Biologics Inc. (NASDAQ:ABCL) shareholders may be a little concerned to see that the Independent Non-Employee Director, John Hamer, recently sold a substantial US$5.1m worth of stock at a price of US$16.94 per share. That diminished their holding by a very significant 70%, which arguably implies a strong desire to reallocate capital.
The Last 12 Months Of Insider Transactions At AbCellera Biologics
Over the last year, we can see that the biggest insider sale was by the President, Carl Hansen, for US$145m worth of shares, at about US$25.50 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$18.74. So it may not shed much light on insider confidence at current levels.
Over the last year, we can see that insiders have bought 3.13m shares worth US$63m. On the other hand they divested 16.20m shares, for US$394m. All up, insiders sold more shares in AbCellera Biologics than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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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. AbCellera Biologics insiders own about US$1.4b worth of shares (which is 27% of the company). 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 Do The AbCellera Biologics Insider Transactions Indicate?
The stark truth for AbCellera Biologics is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, AbCellera Biologics makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. To help with this, we've discovered 3 warning signs (1 is concerning!) that you ought to be aware of before buying any shares in AbCellera Biologics.
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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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