Yahoo Finance Trade Alert: The Independent Chairman of the Board Of Pharmaxis Ltd (ASX:PXS), Malcolm McComas, Has Just Spent AU$113k Buying 71% More Shares
Even if it's not a huge purchase, we think it was good to see that Malcolm McComas, the Independent Chairman of the Board of Pharmaxis Ltd (ASX:PXS) recently shelled out AU$113k to buy stock, at AU$0.11 per share. Even though that isn't a massive buy, it did increase their holding by 71%, which is arguably a good sign.
Check out our latest analysis for Pharmaxis
Pharmaxis Insider Transactions Over The Last Year
In fact, the recent purchase by Malcolm McComas was the biggest purchase of Pharmaxis shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.10). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. 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 Malcolm McComas.
Malcolm McComas purchased 1.53m shares over the year. The average price per share was AU$0.10. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Pharmaxis is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Pharmaxis insiders own about AU$3.6m worth of shares (which is 6.5% of the company). 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.
So What Do The Pharmaxis Insider Transactions Indicate?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Pharmaxis stock. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 4 warning signs for Pharmaxis (1 can't be ignored) you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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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.
