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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 Selecta Biosciences, Inc. (NASDAQ:SELB).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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.’
The Last 12 Months Of Insider Transactions At Selecta Biosciences
Over the last year, we can see that the biggest insider purchase was by Timothy Springer for US$6.1m worth of shares, at about US$1.50 per share. Even though the purchase was made at a significantly lower price than the recent price (US$2.10), we still think insider buying is a positive. But because it occurred at a lower valuation, it doesn’t tell us much about whether insiders might find today’s price attractive.
Over the last year, we can see that insiders have bought 8.2m shares worth US$12m. In the last twelve months Selecta Biosciences insiders were buying shares, but not selling. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Selecta Biosciences is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Selecta Biosciences
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. Based on our data, Selecta Biosciences insiders have about 2.0% of the stock, worth approximately US$1.9m. We consider this fairly low insider ownership.
What Might The Insider Transactions At Selecta Biosciences Tell Us?
The fact that there have been no Selecta Biosciences insider transactions recently certainly doesn’t bother us. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we’d be more comfortable if they owned more Selecta Biosciences stock. Of course, the future is what matters most. So if you are interested in Selecta Biosciences, you should check out this free report on analyst forecasts for the company.
Of course Selecta Biosciences 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 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 firstname.lastname@example.org. 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.