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Biogen: Insiders Are Buying. Should You Be Too?

As former Fidelity Investments star Peter Lynch once observed, “Insiders might sell their shares for any number of reasons, but they buy them for only one: They think the price will rise.”

Keeping that thought in mind, the biotechnology analysts at Cowen -- Phil Nadeau, Eric Schmidt and Joseph Thome -- analyzed the Form 4 SEC filings and open market transactions by insiders for the 10 largest biotechnology companies over the past decade and gauged the stock’s performance over the one-, three-, six- and 12-month period following the transactions.

What did they find?

We find that purchases by insiders are a strong predictor of out...