Should You Be Worried About Insider Transactions At Adamas Pharmaceuticals, Inc. (NASDAQ:ADMS)?

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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. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Adamas Pharmaceuticals, Inc. (NASDAQ:ADMS), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’

Check out our latest analysis for Adamas Pharmaceuticals

The Last 12 Months Of Insider Transactions At Adamas Pharmaceuticals

In the last twelve months, the biggest single sale by an insider was when the , Richard King, sold US$64k worth of shares at a price of US$25.48 per share. 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$4.54). So it may not shed much light on insider confidence at current levels.

Over the last year we saw more insider selling of Adamas Pharmaceuticals shares, than buying. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NasdaqGM:ADMS Recent Insider Trading, June 19th 2019
NasdaqGM:ADMS Recent Insider Trading, June 19th 2019

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Insiders at Adamas Pharmaceuticals Have Sold Stock Recently

Over the last three months, we’ve seen significant insider selling at Adamas Pharmaceuticals. In total, insiders sold US$100k 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

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests Adamas Pharmaceuticals insiders own 2.1% of the company, worth about US$2.7m. We consider this fairly low insider ownership.

What Might The Insider Transactions At Adamas Pharmaceuticals Tell Us?

Insiders haven’t bought Adamas Pharmaceuticals stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn’t give us much comfort. Insiders own relatively few shares in the company, and when you consider the sales, we’re not particularly excited about the stock. We’d certainly think twice before buying! 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 Adamas Pharmaceuticals may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.

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 editorial-team@simplywallst.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.