Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we’ll take a look at whether insiders have been buying or selling shares in Puma Biotechnology, Inc. (NASDAQ:PBYI).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.’
The Last 12 Months Of Insider Transactions At Puma Biotechnology
Over the last year, we can see that the biggest insider sale was by the Founder, Alan Auerbach, for US$91k worth of shares, at about US$20.67 per share. While we don’t usually like to see insider selling, it’s more concerning if the sales take price at a lower price. The silver lining is that this sell-down took place above the latest price (US$16.89). So it may not tell us anything about how insiders feel about the current share price.
Over the last year, we note insiders sold 9090 shares worth US$217k. Insiders in Puma Biotechnology didn’t buy any shares in the last year. The chart below shows insider transactions (by individuals) 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Puma Biotechnology Insiders Are Selling The Stock
Over the last three months, we’ve seen significant insider selling at Puma Biotechnology. In total, insiders dumped US$61k worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the insiders think that the shares are a bargain.
Does Puma Biotechnology Boast High Insider Ownership?
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. Puma Biotechnology insiders own about US$94m worth of shares. That equates to 13% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Puma Biotechnology Tell Us?
Insiders sold Puma Biotechnology shares recently, but they didn’t buy any. And even if we look to the last year, we didn’t see any purchases. While insiders do own shares, they don’t own a heap, and they have been selling. So we’d only buy after careful consideration. Of course, the future is what matters most. So if you are interested in Puma Biotechnology, you should check out this free report on analyst forecasts for the company.
Of course Puma Biotechnology may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 email@example.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.