We often see insiders buying up shares in companies that perform well over the long term. 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 Adverum Biotechnologies, Inc. (NASDAQ:ADVM).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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
The President, Leone Patterson, made the biggest insider sale in the last 12 months. That single transaction was for US$325k worth of shares at a price of US$24.68 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$11.80). So it may not tell us anything about how insiders feel about the current share price. Leone Patterson was the only individual insider to sell over the last year.
In the last twelve months insiders purchased 25.38k shares for US$337k. But they sold 13.17k shares for US$325k. Overall, Adverum Biotechnologies insiders were net buyers during 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Adverum Biotechnologies
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Our data indicates that Adverum Biotechnologies insiders own about US$7.5m worth of shares (which is 0.6% of the company). Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The Adverum Biotechnologies Insider Transactions Indicate?
The fact that there have been no Adverum Biotechnologies insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Adverum Biotechnologies insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Adverum Biotechnologies. At Simply Wall St, we've found that Adverum Biotechnologies has 4 warning signs (3 shouldn't be ignored!) that deserve your attention before going any further with your analysis.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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.
If you decide to trade Adverum Biotechnologies, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.