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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 before you buy or sell Abcam plc (LON:ABC), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
Abcam Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Co-Founder & Non-Executive Deputy Chairman Jonathan Milner for UK£17m worth of shares, at about UK£14.41 per share. That means that an insider was selling shares at around the current price of UK£12.79. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price. Notably Jonathan Milner was also the biggest buyer, having purchased UK£2.3m worth of shares.
Happily, we note that in the last year insiders paid UK£2.3m for 209.32k shares. But insiders sold 1.17m shares worth UK£17m. Over the last year we saw more insider selling of Abcam shares, than buying. They sold for an average price of about UK£14.41. It’s not too encouraging to see that insiders have sold at below the current price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn’t jump to conclusions. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Abcam Insiders Bought Stock Recently
Over the last quarter, Abcam insiders have spent a meaningful amount on shares. Specifically, Jonathan Milner bought UK£2.0m worth of shares in that time, and we didn’t record any sales whatsoever. That shows some optimism about the company’s future.
Does Abcam Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Abcam insiders own 11% of the company, currently worth about UK£299m 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.
So What Do The Abcam Insider Transactions Indicate?
It’s certainly positive to see the recent insider purchase. But we can’t say the same for the transactions over the last 12 months. The high levels of insider ownership, and the recent buying by an insider, suggests they are well aligned and optimistic. Of course, the future is what matters most. So if you are interested in Abcam, you should check out this free report on analyst forecasts for the company.
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.