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 before you buy or sell IVERIC bio, Inc. (NASDAQ:ISEE), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. 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'.
IVERIC bio Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CEO, President & Director Glenn Sblendorio bought US$250k worth of shares at a price of US$4.00 per share. Even though the purchase was made at a significantly lower price than the recent price (US$6.01), we still think insider buying is a positive. 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.
Glenn Sblendorio bought a total of 77.50k shares over the year at an average price of US$3.83. 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!
IVERIC bio is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does IVERIC bio Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own US$2.9m worth of IVERIC bio stock, about 0.5% of the company. We consider this fairly low insider ownership.
So What Do The IVERIC bio Insider Transactions Indicate?
The fact that there have been no IVERIC bio 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 IVERIC bio insiders bought more shares in the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 4 warning signs for IVERIC bio (2 shouldn't be ignored) you should be aware of.
But note: IVERIC bio 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.
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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