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 we'll take a look at whether insiders have been buying or selling shares in ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD).
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, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
ACADIA Pharmaceuticals Insider Transactions Over The Last Year
The CEO & Director, Stephen Davis, made the biggest insider sale in the last 12 months. That single transaction was for US$718k worth of shares at a price of US$50.61 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$23.69). So it may not shed much light on insider confidence at current levels.
ACADIA Pharmaceuticals insiders didn't buy any shares over the last year. 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!
I will like ACADIA Pharmaceuticals better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does ACADIA Pharmaceuticals Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. ACADIA Pharmaceuticals insiders own about US$18m worth of shares. That equates to 0.5% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At ACADIA Pharmaceuticals Tell Us?
The fact that there have been no ACADIA Pharmaceuticals insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by ACADIA Pharmaceuticals insiders. But it's good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing ACADIA Pharmaceuticals. Every company has risks, and we've spotted 2 warning signs for ACADIA Pharmaceuticals 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, but not derivative transactions.
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