Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Generation Bio Co. (NASDAQ:GBIO), that sends out a positive message to the company’s shareholders.
Although we don’t think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Generation Bio
The Independent Director Charles Rowland made the biggest insider purchase in the last 12 months. That single transaction was for US$276k worth of shares at a price of US$5.48 each. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$4.45). It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months Generation Bio insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Generation Bio is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Generation Bio Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Generation Bio insiders own 5.1% of the company, worth about US$13m. 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 Do The Generation Bio Insider Transactions Indicate?
The fact that there have been no Generation Bio insider transactions recently certainly doesn’t bother us. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Generation Bio and their transactions don’t cause us concern. 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. When we did our research, we found 5 warning signs for Generation Bio (2 are potentially serious!) that we believe deserve your full attention.
But note: Generation 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.
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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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