According to the latest SEC filings, insiders at Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) have increased their position in the stock by 6.87% over the past 6 months. Insiders now own 17.05% of total outstanding shares.
There are both legal and illegal types of insider trading. Illegal insider trading is the buying or selling of a stock by insiders who are in possession of knowledge that has yet to be made public. Anybody who has this information can be convicted of insider trading, including brokers, family, friends and employees, not just upper management. The Securities and Exchange Commission (SEC) is very strict with those who trade illegally because the practice undermines investor confidence and the integrity of the market. “Tipsters”, people who give insider information to outsiders, can also be found liable.
Insider trading isn’t always illegal, however. Insiders buy and sell their own company’s stock all the time, though their trading is restricted. The SEC considers an “insider” to be any individual who possesses at least a 10% stake in the company. These insiders are required to report their transactions within two business days of the transaction date.
This information is valuable to individual investors. If insiders are buying stock in their own companies, they might know something that a normal investor does not. Insiders are prevented from trading their company stock within a six-month period, therefore it can be assumed that insiders buy their own stocks because they feel that their company will perform well over a long period of time. Peter Lynch, regarded as one of the greatest investors of all time, notes “insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.”
University of Michigan professor and noted insider trading researcher discovered that when insiders bought shares of their own companies, the stocks outperformed the total market by 8.9% over the next 12-month period. When they sold shares, the stock underperformed 5.4%.
The stock stands 35.91% away from its 50-day simple moving average and also -28.48% away from the 200-day average. Recently, the equity stands -84.55% away from the 52-week high and 108.94% from the 52-week low. The RSI (Relative Strength Index), an indicator that shows price strength by comparing upward and downward close-to-close movements is 56.22.
Wall Street analysts on the sell-side covering shares of Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) have a mean recommendation of 3.00 on the shares. This is based on a numerical chart where each stock recommendation (Buy,Sell,Hold) is translated into a numerical equivalent. A low number indicates a Buy and a higher number a Sell. In terms of where analysts see the stock headed, they have a consensus price target of $1.50 on the shares.
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