In This Article:
We often see insiders buying up shares in companies that perform well over the long term. 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 Jazz Pharmaceuticals plc (NASDAQ:JAZZ).
Do Insider Transactions Matter?
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.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
See our latest analysis for Jazz Pharmaceuticals
The Last 12 Months Of Insider Transactions At Jazz Pharmaceuticals
The Independent Director Seamus Mulligan made the biggest insider purchase in the last 12 months. That single transaction was for US$5.6m worth of shares at a price of US$112 each. We do like to see buying, but this purchase was made at well below the current price of US$161. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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).
Jazz Pharmaceuticals Insiders Are Selling The Stock
We have seen a bit of insider selling at Jazz Pharmaceuticals, over the last three months. Insiders sold just US$39k worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the volume sold is so low that it really doesn't bother us.
Insider Ownership
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. Jazz Pharmaceuticals insiders own about US$246m worth of shares (which is 2.7% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.