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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 before you buy or sell G1 Therapeutics, Inc. (NASDAQ:GTHX), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At G1 Therapeutics
The Chief Scientific Officer, Jay Strum, made the biggest insider sale in the last 12 months. That single transaction was for US$596k worth of shares at a price of US$61.00 each. 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 US$21.61. So it may not tell us anything about how insiders feel about the current share price. Jay Strum was the only individual insider to sell over the last year.
In the last twelve months insiders purchased 4420 shares for US$110k. On the other hand they divested 10000 shares, for US$596k. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like G1 Therapeutics better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does G1 Therapeutics Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. G1 Therapeutics insiders own about US$13m worth of shares. That equates to 1.7% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About G1 Therapeutics Insiders?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. We don’t take much encouragement from the transactions by G1 Therapeutics insiders. But we do like the fact that insiders own a fair chunk of the company. Of course, the future is what matters most. So if you are interested in G1 Therapeutics, you should check out this free report on analyst forecasts for the company.
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.
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.