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Should You Take Comfort From Insider Transactions At Recipharm AB (publ) (STO:RECI B)?

Simply Wall St

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 Recipharm AB (publ) (STO:RECI B).

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

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 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'.

View our latest analysis for Recipharm

The Last 12 Months Of Insider Transactions At Recipharm

Over the last year, we can see that the biggest insider purchase was by Independent Director Anders Carlberg for kr605k worth of shares, at about kr121 per share. That means that an insider was happy to buy shares at around the current price of kr145. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Recipharm share holders is that insiders were buying at near the current price.

In the last twelve months Recipharm insiders were buying shares, but not selling. You can see the insider transactions (by individuals) 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!

OM:RECI B Recent Insider Trading, December 16th 2019

Recipharm 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.

Have Recipharm Insiders Traded Recently?

There was some insider buying at Recipharm over the last quarter. Insiders purchased kr85k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Recipharm insiders own 27% of the company, currently worth about kr2.7b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Recipharm Tell Us?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Recipharm. Nice! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Recipharm.

But note: Recipharm 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.

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, but not derivative transactions.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

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. Thank you for reading.