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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX).
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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 Syndax Pharmaceuticals
Over the last year, we can see that the biggest insider purchase was by CEO & Director Briggs Morrison for US$152k worth of shares, at about US$7.56 per share. So it’s clear an insider wanted to buy, at around the current price, which is US$8.98. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. While we always like to see insider buying, it’s less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we’re pleased to report that the insider purchases were made at close to current prices.
Happily, we note that in the last year insiders bought 21712 shares for a total of US$159k. Syndax Pharmaceuticals may have bought shares in the last year, but they didn’t sell any. 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!
Insiders at Syndax Pharmaceuticals Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Syndax Pharmaceuticals. We can see that Briggs Morrison paid US$152k for shares in the company. No-one sold. That shows some optimism about the company’s future.
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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Our data isn’t picking up on much insider ownership at Syndax Pharmaceuticals, though insiders do hold about US$221k worth of shares. This level of insider ownership is notably low, and not very encouraging.
What Might The Insider Transactions At Syndax Pharmaceuticals Tell Us?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we’d like to see, the history of transactions imply that Syndax Pharmaceuticals insiders are reasonably well aligned, and optimistic for the future. Of course, the future is what matters most. So if you are interested in Syndax Pharmaceuticals, you should check out this free report on analyst forecasts for the company.
Of course Syndax Pharmaceuticals 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.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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.