Independent Director of Avantor Picks Up 41% More Stock

Those following along with Avantor, Inc. (NYSE:AVTR) will no doubt be intrigued by the recent purchase of shares by Gregory Summe, Independent Director of the company, who spent a stonking US$1.1m on stock at an average price of US$11.25. Not only is that a big swing, but it increased their holding size by 41%, which is definitely great to see.

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Avantor Insider Transactions Over The Last Year

Notably, that recent purchase by Independent Director Gregory Summe was not the only time they bought Avantor shares this year. They previously made an even bigger purchase of US$1.3m worth of shares at a price of US$12.56 per share. That means that even when the share price was higher than US$11.82 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months insiders purchased 321.19k shares for US$3.9m. But insiders sold 13.95k shares worth US$222k. In total, Avantor insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Avantor

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Insider Ownership Of Avantor

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Avantor insiders own about US$34m worth of shares. That equates to 0.4% 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.

So What Does This Data Suggest About Avantor Insiders?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Avantor we think they are probably pretty confident of a bright future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. You'd be interested to know, that we found 1 warning sign for Avantor and we suggest you have a look.

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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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.