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 Galectin Therapeutics, Inc. (NASDAQ:GALT).
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.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Galectin Therapeutics Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Independent Director, Gilbert Amelio, for US$99k worth of shares, at about US$3.30 per share. That means that an insider was selling shares at around the current price of US$2.91. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn’t a major concern, though it’s hardly a good sign. Gilbert Amelio was the only individual insider to sell shares in the last twelve months.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 17% of Galectin Therapeutics shares, worth about US$28m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Galectin Therapeutics Insider Transactions Indicate?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. Still, the insider transactions at Galectin Therapeutics in the last 12 months are not very heartening. But it’s good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Galectin Therapeutics. While conducting our analysis, we found that Galectin Therapeutics has 2 warning signs and it would be unwise to ignore them.
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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