We often see insiders buying up shares in companies that perform well over the long term. 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 Savara Inc. (NASDAQ:SVRA).
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.
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 Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Savara Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Co-Founder Robert Neville bought US$150k worth of shares at a price of US$6.38 per share. Even though the purchase was made at a significantly lower price than the recent price (US$10.70), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn’t tell us much about what they think of current prices.
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!
Savara is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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. From our data, it seems that Savara insiders own 2.2% of the company, worth about US$8.3m. However, it’s possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we’re not overly impressed by these holdings.
So What Do The Savara Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded Savara shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it’d be more encouraging if Savara insiders bought more shares in the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Savara.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.