We'd be surprised if NovoCure Limited (NASDAQ:NVCR) shareholders haven't noticed that the Chief Medical Officer, Ely Benaim, recently sold US$399k worth of stock at US$74.00 per share. In particular, we note that the sale equated to a 89% reduction in their position size, which doesn't exactly instill confidence.
The Last 12 Months Of Insider Transactions At NovoCure
Over the last year, we can see that the biggest insider sale was by the Chief Financial Officer, Ashley Cordova, for US$836k worth of shares, at about US$141 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$75.62). So it is hard to draw any strong conclusion from it.
All up, insiders sold more shares in NovoCure than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that NovoCure insiders own 14% of the company, worth about US$1.1b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The NovoCure Insider Transactions Indicate?
Insiders haven't bought NovoCure stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about 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. You'd be interested to know, that we found 2 warning signs for NovoCure and we suggest you have a look.
But note: NovoCure 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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