Watching insiders is like participating in a weeks-long stakeout. You expect something to happen, but you don't know what. So you settle in, sip your coffee, and wait for clues to solving the big case.
Here, the "case" is direction: Which way is your stock headed? The "clues" come in the form of insider buying and selling action. Have a look at Amgen
Insider Rating |
Bearish
|
Business Description |
One of the world's largest and most successful biotechs. |
Recent Price |
$53.71 |
CAPS Stars (out of 5) |
**** |
Percentage of Shares Owned by Insiders |
0.13% |
Net Buying (Selling)* |
($9.59 million) |
Last Buyer (% Increase) |
Vance Coffman, Director |
Last Seller (% Decrease) |
Brian McNamee, Sr. VP Human Resources |
Competitors |
Novartis |
CAPS Members Bullish on AMGN Also Bullish on |
Johnson & Johnson |
CAPS Members Bearish on AMGN Also Bearish on |
Starbucks |
Recent Foolish Coverage of AMGN |
Good Luck in 2010, Amgen
|
Sources: Form 4 Oracle, Capital IQ, and Motley Fool CAPS. Data current as of Oct. 28.
*Open market sales and purchases only.
What we're tracking here, and why
Insider buying data can be confusing. Here, I'm concentrating only on buying and selling conducted in the open market. With most of these transactions, insiders control the timing. Other times they're buying or selling under the purview of a 10b5-1 plan. Either way, personal holdings are being bought and sold.
Those personal holdings matter the most -- they're the shares executives hold for investment, rather than compensation. Employee stock options are different; they're compensatory in the purest sense. I've stripped out options-related buying and selling from the calculations you see above.
The Foolish view: Bearish
Biotech isn't my beat, but I can tell when a business is beleaguered, and Amgen definitely fits the bill. A U.K. trust is suing the company and industry peer Wyeth, now a subsidiary of Pfizer
And that's not the only bad news, at least as far as CAPS investor PenicillinG is concerned. "After watching the FDA advisory meeting for denosumab, I believe Amgen will be lucky to get an osteoporosis indication as a second line treatment for women with a high risk of fractures (the PDUFA date is October 19)," this Fool wrote in early October. "Amgen was literally pounded by the panel on safety. [Eli Lilly's] Forteo (even though a once a day injection) is a better drug."
Insiders would likely dispute that claim, but there's no disputing the high volume of selling at Amgen over the past year. Even more troubling than the volume is the pricing. Executives and board members have sold at prices lower than today's. The lone buy came late last year, at north of $60 per share. But without corresponding buys from other insiders, I find this outlier to be little more than a green buoy in a sea of red.
Do you agree? Disagree? Log into Motley Fool CAPS today and tell us how you would rate Amgen.
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