Pfizer Inc (NYSE: PFE) Insider Report
Pfizer made huge waves on Monday on the announcement that their vaccine was 90% effective among volunteers with no prior COVID infections. In the Northern Hemisphere where COVID cases have jumped significantly, that is a huge announcement. You would think that being the first to produce a workable vaccine for public use would be a huge opportunity for your company.
In response to the news, the share price for PFE opened 15% higher before falling back to close 7.6% higher. If the vaccine was successful at generating a robust immune response, the announcement was successful at generating a robust response from stocks benefiting by reopening. Given the intra-day response from companies like Las Vegas Sands Corp (LVS) or JetBlue Airways Corp (JBLU) it appears like a home run.
Despite the failure of Pfizer to hold its highs, it was still a major breakout for the company. Is it possible that the vaccine is more beneficial for those companies that Pfizer? Looking at the insider selling by the CEO post-announcement, it does call this into question.
Pfizer Insider Transaction History
Pfizer has a history of insiders selling stock. That isn’t exactly an uncommon occurrence, especially in the market today. However, there are a few questions to ask that may increase the significance:
- Who’s doing the selling (CEO versus a director)
- What percentage of their holdings are sold?
- How many insiders sold?
So, let’s take a closer look at the insider transaction history. In the image below, you’ll see that Pfizer has had two insider sale transactions so far this month. With a historical range of zero to seven transactions, it’s not exactly a barnburner, but we’re still early in the month.
In the next image, it displays the actual shares that have been sold each month over the past 3 years. The share count for this month is the fourth highest over the period in just 10 days.
Pfizer Insider Sales
As you more closely examine that details of Pfizer’s insider transactions, you get a closer look at their significance. On the day of the announcement there were two transactions that were made by the CEO of the company, Albert Bourla and the Executive Vice President (EVP), Sally Sussman.
According to this data, the CEO reduced is direct holdings from 214, 320 shares to 81,812, a 62% reduction. The EVP reduced her holdings by nearly 29% from 152,466 to 108,804. Considering the size of the transactions, the insiders involved and the percentage of their direct holdings, this would be considered significant. If you notice the transaction price for both transactions, they occurred within $0.05 of the intraday high of $41.99.
Pfizer Chart
Looking at the chart of Pfizer, the stock initially gapped above its $39.40 resistance. The price failed to hold that level and slipped further the past two days. The price is currently holding the low of the gap day from Monday near $38.38.
Today’s long-legged spinning top is an indication of indecision and reflects some balance between buyers and sellers. The level aligns with previous resistance from October.
Conclusion
The insider selling activity in Pfizer isn’t exactly a strong indication to short the stock. However, it does give the impression that the price is relatively overvalued near $42. As the price is setting up to establish support in the coming days, any follow-through movement toward $42 would be an indication to consider selling.
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