Investors who take an interest in Avadel Pharmaceuticals plc (NASDAQ:AVDL) should definitely note that the Senior VP & CFO, Thomas McHugh, recently paid US$2.14 per share to buy US$107k worth of the stock. That certainly has us anticipating the best, especially since they thusly increased their own holding by 233%, potentially signalling some real optimism.
The Last 12 Months Of Insider Transactions At Avadel Pharmaceuticals
In fact, the recent purchase by Thomas McHugh was the biggest purchase of Avadel Pharmaceuticals shares made by an insider individual in the last twelve months, according to our records. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$2.40. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
While Avadel Pharmaceuticals insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, Avadel Pharmaceuticals insiders have about 0.9% of the stock, worth approximately US$1.2m. We prefer to see high levels of insider ownership.
So What Do The Avadel Pharmaceuticals Insider Transactions Indicate?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Avadel Pharmaceuticals stock. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 2 warning signs for Avadel Pharmaceuticals (1 is a bit concerning) you should be aware of.
Of course Avadel Pharmaceuticals may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
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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.