It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Clovis Oncology, Inc. (NASDAQ:CLVS).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
Check out our latest analysis for Clovis Oncology
Clovis Oncology Insider Transactions Over The Last Year
In fact, the recent purchase by Thorlef Spickschen was the biggest purchase of Clovis Oncology shares made by an insider individual in the last twelve months, according to our records. That implies that an insider found the current price of US$5.60 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Clovis Oncology insider decided to buy shares at close to current prices. The only individual insider to buy over the last year was Thorlef Spickschen.
Thorlef Spickschen purchased 17800 shares over the year. The average price per share was US$5.56. You can see the insider transactions (by individuals) over the last year depicted in the chart below. 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).
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Clovis Oncology insiders own 2.9% of the company, worth about US$8.7m. Whilst better than nothing, we're not overly impressed by these holdings.