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Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) insiders sold US$3.7m worth of stock, a possible red flag that's yet to materialize
While Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) shareholders have had a good week with the stock up 5.0%, they shouldn't let their guards down. Although prices were relatively low, insiders chose to sell US$3.7m worth of stock in the past 12 months. This could be a sign of impending weakness.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for Amphastar Pharmaceuticals
Amphastar Pharmaceuticals Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Chairman of the Board, Ziping Luo, sold US$3.7m worth of shares at a price of US$35.78 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$37.20. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 3.2% of Ziping Luo's holding. Ziping Luo was the only individual insider to sell over the last year.
The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Amphastar 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 Amphastar Pharmaceuticals Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Amphastar Pharmaceuticals insiders own 7.9% of the company, currently worth about US$136m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Amphastar Pharmaceuticals Tell Us?
It doesn't really mean much that no insider has traded Amphastar Pharmaceuticals shares in the last quarter. While we feel good about high insider ownership of Amphastar Pharmaceuticals, we can't say the same about the selling of shares. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
What are the risks and opportunities for Amphastar Pharmaceuticals?
Amphastar Pharmaceuticals, Inc., a bio-pharmaceutical company, develops, manufactures, markets, and sells generic and proprietary injectable, inhalation, and intranasal products in the United States, China, and France.
Rewards
Trading at 31.7% below our estimate of its fair value
Earnings are forecast to grow 10.29% per year
Earnings grew by 47.1% over the past year
Risks
No risks detected for AMPH from our risks checks.
Further research on
Amphastar Pharmaceuticals
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
About NasdaqGS:AMPH
Amphastar Pharmaceuticals
Amphastar Pharmaceuticals, Inc., a bio-pharmaceutical company, develops, manufactures, markets, and sells generic and proprietary injectable, inhalation, and intranasal products in the United States, China, and France.
Excellent balance sheet with proven track record.
