Even though NovoCure Limited (NASDAQ:NVCR) has fallen by 13% over the past week , insiders who sold US$5.5m worth of stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of US$74.36 is still lower than the current share price.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for NovoCure
NovoCure Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Chief Operating Officer, Wilhelmus C. Groenhuysen, sold US$2.0m worth of shares at a price of US$76.16 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$14.00. So it may not tell us anything about how insiders feel about the current share price.
NovoCure insiders didn't buy any shares 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 want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
NovoCure Insiders Are Selling The Stock
The last quarter saw substantial insider selling of NovoCure shares. Specifically, insiders ditched US$66k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Does NovoCure Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. NovoCure insiders own about US$156m worth of shares (which is 10% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The NovoCure Insider Transactions Indicate?
Insiders haven't bought NovoCure stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 3 warning signs for NovoCure (1 shouldn't be ignored!) that we believe deserve your full attention.
Of course NovoCure 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 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.