We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Avid Bioservices, Inc. (NASDAQ:CDMO).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
See our latest analysis for Avid Bioservices
The Last 12 Months Of Insider Transactions At Avid Bioservices
Over the last year, we can see that the biggest insider purchase was by Independent Director Mark Bamforth for US$104k worth of shares, at about US$4.01 per share. Even though the purchase was made at a significantly lower price than the recent price (US$13.15), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
While Avid Bioservices 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of Avid Bioservices
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Insiders own 7.0% of Avid Bioservices shares, worth about US$56m. 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 Avid Bioservices Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Avid Bioservices shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Avid Bioservices insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 2 warning signs for Avid Bioservices and we suggest you have a look.