We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Minerva Neurosciences, Inc. (NASDAQ:NERV).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
Check out our latest analysis for Minerva Neurosciences
The Last 12 Months Of Insider Transactions At Minerva Neurosciences
Over the last year, we can see that the biggest insider purchase was by Lead Independent Director William Doyle for US$79k worth of shares, at about US$9.88 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$6.75). It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 57111 shares for US$393k. On the other hand they divested 3117 shares, for US$25k. In total, Minerva Neurosciences insiders bought more than they sold over the last year. The average buy price was around US$6.89. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Insiders at Minerva Neurosciences Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Minerva Neurosciences. Not only was there no selling that we can see, but they collectively bought US$190k worth of shares. This makes one think the business has some good points.
Does Minerva Neurosciences 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Minerva Neurosciences insiders own about US$10m worth of shares. That equates to 3.9% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Minerva Neurosciences Insider Transactions Indicate?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. Insiders likely see value in Minerva Neurosciences shares, given these transactions (along with notable insider ownership of the company). Of course, the future is what matters most. So if you are interested in Minerva Neurosciences, you should check out this free report on analyst forecasts for the company.
Of course Minerva Neurosciences 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.