It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell bluebird bio, Inc. (NASDAQ:BLUE), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
bluebird bio Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the President, Nick Leschly, sold US$470k worth of shares at a price of US$45.46 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$27.33. So it may not shed much light on insider confidence at current levels.
bluebird bio insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!NasdaqGS:BLUE Insider Trading Volume July 21st 2021
I will like bluebird bio better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at bluebird bio Have Sold Stock Recently
We have seen a bit of insider selling at bluebird bio, over the last three months. Insiders only netted US$32k selling shares, in that period. It's not great to see insider selling, nor the lack of recent buyers. But the volume sold is so low that it really doesn't bother us.
Insider Ownership of bluebird bio
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. bluebird bio insiders own about US$18m worth of shares. That equates to 1.0% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About bluebird bio Insiders?
Our data shows a little more insider selling, but no insider buying, in the last three months. However, the sales are not big enough to concern us at all. Recent insider selling makes us a little nervous, in light of the broader picture of bluebird bio insider transactions. But it's good to see that insiders own shares in the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that bluebird bio has 2 warning signs and it would be unwise to ignore them.
But note: bluebird bio may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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