Extensive research shows that corporate insiders tend to make more profit-generating trades than the average non-insider, which serves as the primary reason Insider Monkey, retail investors, analysts and hedge funds have been keeping track of insider trading metrics for years. However, insider selling does not necessarily represent a bearish or negative signal; this kind of insider trading activity needs to be interpreted with high caution.
After all, corporate insiders may cash out holdings for cash needs, tax payments or other reasons unrelated to their companies’ current fundamentals or future prospects. Hence, Insider Monkey does not recommend acting or trading immediately on each freshly-detected insider sale, but rather attempt to complete a more thorough analysis of the companies witnessing insider selling to clarify whether insider sales are indeed cause for concern. In other words, the analysis of insider selling should merely serve as a tool in assessing the potential of a stock. That said, the following article will discuss a set of noteworthy insider sales reported with the SEC on Monday, as well as discuss some mild insider buying observed at two other companies.
Through extensive research that covered the portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).
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CSO and CFO of Battered Biotechnology Company Purchase Shares
Two top-tier executives at Applied Genetic Technologies Corp (NASDAQ:AGTC) purchased shares in the past few weeks. To start with, Chief Scientific Officer Mark S. Shearman purchased a new stake of 3,000 shares on Thursday at a weighted average price of $8.87 per share. Lawrence E. Bullock, Chief Financial Officer since February 2014, snapped up a 10,000-share stake last Monday at a price tag of $8.75 each.
The clinical-stage biotechnology company that uses gene therapy to develop genetic therapies to treat patients with inherited diseases has seen the value of its shares plunge by 56% since the start of the year. Applied Genetic Technologies Corp (NASDAQ:AGTC)’s shares took a serious hit earlier this month, when the company released its financial results for its fiscal-fourth-quarter that ended June 30 and simultaneously provided updates on its ongoing clinical trials. The negative reaction from Wall Street appears to have been related to the company’s clinical updates. The company’s most advanced products are being developed to deal with three inherited orphan diseases of the eye that are caused by mutations in single genes that impact visual functions. Jim Simons’ Renaissance Technologies LLC owned 119,600 shares of Applied Genetic Technologies Corp (NASDAQ:AGTC) at the end of the second quarter.
Follow Applied Genetic Technologies Corp (NASDAQ:AGTC)
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The next two pages of this article will discuss a number of other insider transactions reported with the SEC on Monday.
