Should You Be Worried About Insider Transactions At Amgen Inc. (NASDAQ:AMGN)?




  • In Business
  • 2019-10-10 11:03:26Z
  • By Simply Wall St.
Should You Be Worried About Insider Transactions At Amgen Inc. (NASDAQ:AMGN)?
Should You Be Worried About Insider Transactions At Amgen Inc. (NASDAQ:AMGN)?  

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Amgen Inc. (NASDAQ:AMGN).

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

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 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'.

View our latest analysis for Amgen

Amgen Insider Transactions Over The Last Year

The Senior VP & Chief Compliance Officer, Cynthia Patton, made the biggest insider sale in the last 12 months. That single transaction was for US$999k worth of shares at a price of US$208 each. So we know that an insider sold shares at around the present share price of US$197. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Cynthia Patton was the only individual insider to sell shares in the last twelve months.

You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insiders at Amgen Have Sold Stock Recently

The last three months saw significant insider selling at Amgen. In total, Senior VP & Chief Compliance Officer Cynthia Patton sold US$999k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Does Amgen Boast High Insider Ownership?

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. It's great to see that Amgen insiders own 0.2% of the company, worth about US$195m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Amgen Tell Us?

An insider sold Amgen shares recently, but they didn't buy any. And even if we look to the last year, we didn't see any purchases. But since Amgen is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

But note: Amgen 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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