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 Akebia Therapeutics, Inc. (NASDAQ:AKBA), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
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 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’.
The Last 12 Months Of Insider Transactions At Akebia Therapeutics
The CEO, President & Director, John Butler, made the biggest insider sale in the last 12 months. That single transaction was for US$170k worth of shares at a price of US$3.40 each. While we don’t usually like to see insider selling, it’s more concerning if the sales take place 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$2.88. So it may not shed much light on insider confidence at current levels.
Akebia Therapeutics 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Insider Ownership of Akebia Therapeutics
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. Based on our data, Akebia Therapeutics insiders have about 1.1% of the stock, worth approximately US$5.0m. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Akebia Therapeutics Tell Us?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. The insider transactions at Akebia Therapeutics are not inspiring us to buy. And we’re not picking up on high enough insider ownership to give us any comfort. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Akebia Therapeutics. At Simply Wall St, we found 2 warning signs for Akebia Therapeutics that deserve your attention before buying any shares.
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. 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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