It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in Vascular Biogenics Ltd (NASDAQ:VBLT).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. 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.’
Check out our latest analysis for Vascular Biogenics
Vascular Biogenics Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Thai Lee bought US$950k worth of shares at a price of US$6.40 per share. That means that even when the share price was higher, an insider wanted to purchase shares. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. That purchase may suggest an expectation of positive returns over the long term. The only inside buyer over the last year was Thai Lee.
You can see the insider transactions over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Vascular Biogenics
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Vascular Biogenics insiders own about US$14m worth of shares. That equates to 31% of the company. While this is strong but not in the top group, when it comes to insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Vascular Biogenics Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded Vascular Biogenics shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don’t see anything to make us think Vascular Biogenics insiders are doubting the company, and they do own shares. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Vascular Biogenics.
But note: Vascular Biogenics 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 editorial-team@simplywallst.com.