It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Avadel Pharmaceuticals plc's (NASDAQ:AVDL) case, it's fantastic news for shareholders.
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 Avadel Pharmaceuticals
The Last 12 Months Of Insider Transactions At Avadel Pharmaceuticals
The Independent Director, Mark McCamish, made the biggest insider sale in the last 12 months. That single transaction was for US$433k worth of shares at a price of US$14.93 each. While insider selling is a negative, to us, it is more negative if the shares are sold 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$11.10. So it may not shed much light on insider confidence at current levels. Mark McCamish was the only individual insider to sell shares in the last twelve months.
Over the last year, we can see that insiders have bought 68.50k shares worth US$776k. But insiders sold 28.98k shares worth US$433k. In total, Avadel Pharmaceuticals insiders bought more than they sold over the last year. They paid about US$11.33 on average. These transactions suggest that insiders have considered the current price attractive. 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!
Avadel Pharmaceuticals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders At Avadel Pharmaceuticals Have Sold Stock Recently
We've seen more insider selling than insider buying at Avadel Pharmaceuticals recently. We note Independent Director Mark McCamish cashed in US$433k worth of shares. On the other hand we note Senior VP & CFO Thomas McHugh bought US$29k worth of shares. The share price has moved a bit recently, but it's hard to argue that the selling is a positive.
Insider Ownership
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. We usually like to see fairly high levels of insider ownership. Insiders own 4.5% of Avadel Pharmaceuticals shares, worth about US$47m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Avadel Pharmaceuticals Tell Us?
The insider sales have outweighed the insider buying, at Avadel Pharmaceuticals, in the last three months. On the other hand, the insider transactions over the last year are encouraging. It's good to see insiders are shareholders. So we're not overly bothered by recent selling. 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. Case in point: We've spotted 2 warning signs for Avadel Pharmaceuticals you should be aware of.
But note: Avadel Pharmaceuticals 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.