We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 we’ll take a look at whether insiders have been buying or selling shares in Minerva Neurosciences, Inc. (NASDAQ:NERV).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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Minerva Neurosciences Insider Transactions Over The Last Year
Lead Independent Director William Doyle made the biggest insider purchase in the last 12 months. That single transaction was for US$79k worth of shares at a price of US$9.88 each. That means that an insider was happy to buy shares at above the current price. Their view may have changed since then, but at least it shows they felt optimistic at the time. That purchase may suggest an expectation of positive returns over the long term. The only individual insider to buy over the last year was William Doyle.
William Doyle bought 22.61k shares over the last 12 months at an average price of US$9.01. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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.
Insiders at Minerva Neurosciences Have Bought Stock Recently
Over the last three months, we’ve seen significantly more insider buying, than insider selling, at Minerva Neurosciences. In total, William Doyle bought US$83k worth of shares in that time. On the other hand, Richard Russell netted US$25k by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Insider Ownership of Minerva Neurosciences
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that Minerva Neurosciences insiders own 4.0% of the company, worth about US$11m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Minerva Neurosciences Insider Transactions Indicate?
It is good to see recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Minerva Neurosciences insiders are well aligned, and that they may think the share price is too low. 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.
But note: Minerva Neurosciences 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 email@example.com.