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The recent price decline of 6.4% in Elanco Animal Health Incorporated's (NYSE:ELAN) stock may have disappointed insiders who bought US$2.0m worth of shares at an average price of US$28.73 in the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$1.5m which is not ideal.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Elanco Animal Health
The Last 12 Months Of Insider Transactions At Elanco Animal Health
In the last twelve months, the biggest single purchase by an insider was when President Jeffrey Simmons bought US$500k worth of shares at a price of US$29.70 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$22.27). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While Elanco Animal Health insiders bought shares during the last year, they didn't sell. 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!
Elanco Animal Health is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Elanco Animal Health Have Bought Stock Recently
It's good to see that Elanco Animal Health insiders have made notable investments in the company's shares. In total, insiders bought US$537k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Elanco Animal Health insiders own 0.3% of the company, worth about US$33m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.