We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Intellia Therapeutics, Inc. (NASDAQ:NTLA).
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.
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 Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Intellia Therapeutics Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Executive VP & COO Andrew Schiermeier for US$118k worth of shares, at about US$16.00 per share. That means that an insider was happy to buy shares at around the current price of US$17.45. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today’s share price, as the discount to value may have narrowed with the rising price. Happily, the Intellia Therapeutics insider decided to buy shares at close to current prices. The only individual insider to buy over the last year was Andrew Schiermeier.
You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Insider Ownership of Intellia Therapeutics
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Intellia Therapeutics insiders own 1.8% of the company, worth about US$15m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Intellia Therapeutics Tell Us?
It doesn’t really mean much that no insider has traded Intellia Therapeutics shares in the last quarter. However, our analysis of transactions over the last year is heartening. Overall we don’t see anything to make us think Intellia Therapeutics insiders are doubting the company, and they do own shares. Of course, the future is what matters most. So if you are interested in Intellia Therapeutics, you should check out this free report on analyst forecasts for the company.
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, but not derivative transactions.
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