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Over the last year, a good number of insiders have significantly increased their holdings in AstraZeneca PLC (LON:AZN). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for AstraZeneca
The Last 12 Months Of Insider Transactions At AstraZeneca
In the last twelve months, the biggest single purchase by an insider was when CEO & Executive Director Pascal Soriot bought UK£2.0m worth of shares at a price of UK£102 per share. That implies that an insider found the current price of UK£107 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the AstraZeneca insiders decided to buy shares at close to current prices.
AstraZeneca insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and 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!
AstraZeneca is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders At AstraZeneca Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at AstraZeneca. Not only was there no selling that we can see, but they collectively bought UK£2.6m worth of shares. This could be interpreted as suggesting a positive outlook.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. AstraZeneca insiders own about UK£49m worth of shares. That equates to 0.03% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The AstraZeneca Insider Transactions Indicate?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest AstraZeneca insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - AstraZeneca has 3 warning signs we think you should be aware of.