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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 we’ll take a look at whether insiders have been buying or selling shares in Adamas Pharmaceuticals, Inc. (NASDAQ:ADMS).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 it is perfectly logical to keep tabs on what insiders are doing. 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’.
Adamas Pharmaceuticals Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Co-Founder Gregory Went sold US$117k worth of shares at a price of US$25.75 per share. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$9.31. So it is hard to draw any strong conclusion from it. Notably Gregory Went was also the biggest buyer, having purchased US$50k worth of shares.
In total, Adamas Pharmaceuticals insiders sold more than they bought over the last year. The sellers received a price of around US$23.98, on average. It is certainly not great to see that insiders have sold shares in the company. However, we do note that the average sale price was significantly higher than the current share price (which is US$9.31). You can see the insider transactions (by 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Are Adamas Pharmaceuticals Insiders Buying Or Selling?
In the last three months company insiders divested US$4.9k worth of stock. That is not a lot. Looking at the net result, we don’t think this recent trading sheds much light on how insiders, as a group, are feeling about the company’s prospects.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data suggests Adamas Pharmaceuticals insiders own 1.7% of the company, worth about US$4.4m. We prefer to see high levels of insider ownership.
So What Do The Adamas Pharmaceuticals Insider Transactions Indicate?
Our data shows a little more insider selling than buying in the last three months. But the difference is small, and thus, not concerning. We’re a little cautious about the insider selling at Adamas Pharmaceuticals. And we’re not picking up on high enough insider ownership to give us any comfort. Of course, the future is what matters most. So if you are interested in Adamas Pharmaceuticals, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.