Insiders At Indivior Sold US$1.8m In Stock, Alluding To Potential Weakness

Simply Wall St · 09/15/2023 05:02

Many Indivior PLC (LON:INDV) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Indivior

Indivior Insider Transactions Over The Last Year

The Chief Manufacturing & Supply Officer, Hillel West, made the biggest insider sale in the last 12 months. That single transaction was for UK£1.7m worth of shares at a price of UK£15.70 each. So it's clear an insider wanted to take some cash off the table, even below the current price of UK£18.56. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 80% of Hillel West's stake.

Over the last year we saw more insider selling of Indivior shares, than buying. 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!

insider-trading-volume
LSE:INDV Insider Trading Volume September 15th 2023

I will like Indivior better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership Of Indivior

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Indivior insiders own about UK£13m worth of shares. That equates to 0.5% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Indivior Insiders?

It doesn't really mean much that no insider has traded Indivior shares in the last quarter. Still, the insider transactions at Indivior in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. Of course, the future is what matters most. So if you are interested in Indivior, you should check out this free report on analyst forecasts for the company.

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 of direct interests only, but not derivative transactions or indirect interests.