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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Prescient Therapeutics Limited (ASX:PTX).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
The Last 12 Months Of Insider Transactions At Prescient Therapeutics
In the last twelve months, the biggest single sale by an insider was when the , Chris Retzos, sold AU$337k worth of shares at a price of AU$0.14 per share. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is AU$0.041. So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was Chris Retzos. Notably Chris Retzos was also the biggest buyer, having purchased AU$473k worth of shares.
Happily, we note that in the last year insiders paid AU$473k for 6.7m shares. But insiders sold 2.5m shares worth AU$337k. In total, Prescient Therapeutics insiders bought more than they sold over the last year. Their average price was about AU$0.071. This is nice to see since it implies that insiders might see value around current prices. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Prescient Therapeutics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Prescient Therapeutics Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that Prescient Therapeutics insiders own 12% of the company, worth about AU$2.0m. But they may have an indirect interest through a corporate structure that we haven't picked up on. Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At Prescient Therapeutics Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Prescient Therapeutics stock. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Prescient Therapeutics may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.