Avid Bioservices Insiders Placed Bullish Bets Worth US$527.5k

Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Avid Bioservices, Inc. (NASDAQ:CDMO), that sends out a positive message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Avid Bioservices

The Last 12 Months Of Insider Transactions At Avid Bioservices

The Director Richard Hancock made the biggest insider purchase in the last 12 months. That single transaction was for US$202k worth of shares at a price of US$5.21 each. Even though the purchase was made at a significantly lower price than the recent price (US$6.90), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months insiders purchased 81.80k shares for US$527k. But they sold 21.31k shares for US$174k. In the last twelve months there was more buying than selling by Avid Bioservices insiders. They paid about US$6.45 on average. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. 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!

Avid Bioservices is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders At Avid Bioservices Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Avid Bioservices. In total, insiders sold US$137k 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 Of Avid Bioservices

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, Avid Bioservices insiders have about 1.0% of the stock, worth approximately US$4.4m. We consider this fairly low insider ownership.

So What Does This Data Suggest About Avid Bioservices Insiders?

Insiders haven't bought Avid Bioservices stock in the last three months, but there was some selling. But we take heart from prior transactions. But insiders own relatively little of the company, from what we can see. So we can't be sure that insiders are optimistic. While it's good to be aware of 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. While conducting our analysis, we found that Avid Bioservices has 2 warning signs and it would be unwise to ignore them.

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 of direct interests only, but not derivative transactions or indirect interests.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com