Yahoo Finance Insiders of Insmed Incorporated (NASDAQ:INSM) are up 17% on their US$1.7m purchase after Insmed Incorporated (NASDAQ:INSM) rose 5.0% last week
Insmed Incorporated (NASDAQ:INSM) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 5.0%, resulting in a US$134m rise in the company's market capitalisation. As a result, the stock they originally bought for US$1.7m is now worth US$2.0m.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Insmed
Insmed Insider Transactions Over The Last Year
The Independent Director Leo Lee made the biggest insider purchase in the last 12 months. That single transaction was for US$796k worth of shares at a price of US$17.69 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$20.61. 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.
Over the last year, we can see that insiders have bought 95.00k shares worth US$1.7m. On the other hand they divested 76.59k shares, for US$1.5m. Overall, Insmed insiders were net buyers during the last year. You can see the insider transactions (by companies and 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).
Insmed Insiders Are Selling The Stock
The last three months saw significant insider selling at Insmed. In total, insiders dumped US$1.0m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Insider Ownership Of Insmed
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Insmed insiders own 0.9% of the company, worth about US$26m. 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 Does This Data Suggest About Insmed Insiders?
Insiders sold stock recently, but they haven't been buying. On the other hand, the insider transactions over the last year are encouraging. And insiders do own shares. So we're not overly bothered by recent selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Insmed is showing 4 warning signs in our investment analysis, and 1 of those makes us a bit uncomfortable...
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
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