Many ADMA Biologics, Inc. (NASDAQ:ADMA) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for ADMA Biologics
The Last 12 Months Of Insider Transactions At ADMA Biologics
In the last twelve months, the biggest single sale by an insider was when the Co-Founder, Adam Grossman, sold US$1.0m worth of shares at a price of US$4.15 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$3.08. So it is hard to draw any strong conclusion from it.
In the last twelve months insiders purchased 191.96k shares for US$685k. But they sold 461.58k shares for US$2.0m. Over the last year we saw more insider selling of ADMA Biologics shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like ADMA Biologics better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders At ADMA Biologics Have Sold Stock Recently
We've seen more insider selling than insider buying at ADMA Biologics recently. In that time, insiders dumped US$2.0m worth of shares. On the flip side, insiders spent US$580k on purchasing shares. The share price has moved a bit recently, but it's hard to argue that the selling is a positive.
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 1.8% of ADMA Biologics shares, worth about US$12m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At ADMA Biologics Tell Us?
The insider sales have outweighed the insider buying, at ADMA Biologics, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. While we like knowing 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. While conducting our analysis, we found that ADMA Biologics has 2 warning signs and it would be unwise to ignore these.
But note: ADMA Biologics 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 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.