Some AbbVie Inc. (NYSE:ABBV) shareholders may be a little concerned to see that the Chairman & CEO, Richard Gonzalez, recently sold a substantial US$25m worth of stock at a price of US$177 per share. That's a big disposal, and it decreased their holding size by 20%, which is notable but not too bad.
The Last 12 Months Of Insider Transactions At AbbVie
In fact, the recent sale by Richard Gonzalez was the biggest sale of AbbVie shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was below the current price of US$181, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 20%of Richard Gonzalez's holding.
In the last year AbbVie insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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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. It's great to see that AbbVie insiders own 0.1% of the company, worth about US$310m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At AbbVie Tell Us?
Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing AbbVie. At Simply Wall St, we found 5 warning signs for AbbVie that deserve your attention before buying any shares.
But note: AbbVie 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.