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 shareholders might well want to know whether insiders have been buying or selling shares in Harvard Bioscience, Inc. (NASDAQ:HBIO).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Colombia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Harvard Bioscience Insider Transactions Over The Last Year
Robert Gagnon made the biggest insider sale in the last 12 months. That single transaction was for US$449k worth of shares at a price of US$4.62 each. That is hardly a positive sign, even though it took place above the latest price (US$3.05). So it may not tell us anything about how insiders feel about the current share price.
Over the last year we saw more insider selling of Harvard Bioscience shares, than buying. They sold for an average price of about US$4.62. Insider selling doesn’t make us excited to buy. But the selling was at much higher prices than the current share price (US$3.05), so it probably doesn’t tell us a lot about the value on offer today. The chart below shows insider transactions 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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. Harvard Bioscience insiders own about US$14m worth of shares (which is 12% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Harvard Bioscience Insiders?
The fact that there have been no Harvard Bioscience insider transactions recently certainly doesn’t bother us. Our analysis of Harvard Bioscience insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Harvard Bioscience.
But note: Harvard Bioscience may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.