We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 we'll take a look at whether insiders have been buying or selling shares in BridgeBio Pharma, Inc. (NASDAQ:BBIO).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
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 BridgeBio Pharma
The Last 12 Months Of Insider Transactions At BridgeBio Pharma
Chief Financial Officer Brian Stephenson made the biggest insider purchase in the last 12 months. That single transaction was for US$944k worth of shares at a price of US$17.00 each. That implies that an insider found the current price of US$21.24 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. In this case we're pleased to report that the insider purchases were made at close to current prices.
BridgeBio Pharma insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by 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!
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).
Insiders at BridgeBio Pharma Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at BridgeBio Pharma. Not only was there no selling that we can see, but they collectively bought US$1.3m worth of shares. That shows some optimism about the company's future.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that BridgeBio Pharma insiders own 9.8% of the company, worth about US$244m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.