We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in ABIOMED, Inc. (NASDAQ:ABMD).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
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.’
Check out our latest analysis for ABIOMED
ABIOMED Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Director Martin Sutter sold US$3.4m worth of shares at a price of US$347 per share. So what is clear is that an insider saw fit to sell at around the current price of US$318. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price. Martin Sutter was the only individual insider to sell over the last year.
You can see a visual depiction of insider transactions 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of ABIOMED
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. ABIOMED insiders own 2.1% of the company, currently worth about US$307m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About ABIOMED Insiders?
The fact that there have been no ABIOMED insider transactions recently certainly doesn’t bother us. While we feel good about high insider ownership of ABIOMED, we can’t say the same about the selling of shares. Of course, the future is what matters most. So if you are interested in ABIOMED, you should check out this free report on analyst forecasts for the company.