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Having purchased US$827k worth of Benitec Biopharma Inc. (NASDAQ:BNTC) stock, the recent 11% pullback is not what insiders may have expected

·3-min read

The recent 11% drop in Benitec Biopharma Inc.'s (NASDAQ:BNTC) stock could come as a blow to insiders who purchased US$827k worth of stock at an average buy price of US$3.96 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$209k, which is not great.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Benitec Biopharma

The Last 12 Months Of Insider Transactions At Benitec Biopharma

Over the last year, we can see that the biggest insider purchase was by insider Steven Oliveira for US$827k worth of shares, at about US$4.25 per share. That means that even when the share price was higher than US$1.00 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Steven Oliveira.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
insider-trading-volume

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Benitec Biopharma

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From what we can see in our data, insiders own only about US$10k worth of Benitec Biopharma shares. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. This level of insider ownership is notably low, and not very encouraging.

What Might The Insider Transactions At Benitec Biopharma Tell Us?

It doesn't really mean much that no insider has traded Benitec Biopharma shares in the last quarter. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Benitec Biopharma insiders are doubting the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To that end, you should learn about the 6 warning signs we've spotted with Benitec Biopharma (including 4 which are potentially serious).

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, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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