Have Insiders Been Buying Axcella Health Inc. (NASDAQ:AXLA) Shares This Year?

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 shareholders might well want to know whether insiders have been buying or selling shares in Axcella Health Inc. (NASDAQ:AXLA).

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

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 Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

Check out our latest analysis for Axcella Health

Axcella Health Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Chairman David Epstein for US$238k worth of shares, at about US$4.75 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$6.24. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

David Epstein bought 64.81k shares over the last 12 months at an average price of US$4.50. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Does Axcella Health Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Axcella Health insiders own 2.5% of the company, worth about US$5.9m. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Axcella Health Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Axcella Health insiders bought more shares in the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For instance, we've identified 3 warning signs for Axcella Health (2 are a bit unpleasant) you should be aware of.

Of course Axcella Health 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 currently account for open market transactions and private dispositions, but not derivative transactions.

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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.
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