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We often see insiders buying up shares in companies that perform well over the long term. 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 we’ll take a look at whether insiders have been buying or selling shares in Adverum Biotechnologies, Inc. (NASDAQ:ADVM).
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, 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 Adverum Biotechnologies
James Scopa made the biggest insider purchase in the last 12 months. That single transaction was for US$134k worth of shares at a price of US$6.71 each. That means that an insider was happy to buy shares at around the current price of US$6.71. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it’s less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Adverum Biotechnologies insider decided to buy shares at close to current prices. James Scopa was the only individual insider to buy shares in the last twelve months.
You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Adverum Biotechnologies is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Adverum Biotechnologies
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Adverum Biotechnologies insiders own about US$29m worth of shares. That equates to 6.8% 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 Adverum Biotechnologies Tell Us?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Adverum Biotechnologies insiders are well aligned, and that they may think the share price is too low. Of course, the future is what matters most. So if you are interested in Adverum Biotechnologies, you should check out this free report on analyst forecasts for the company.
Of course Adverum Biotechnologies may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 firstname.lastname@example.org. 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.