Those following along with OncoCyte Corporation (NYSEMKT:OCX) will no doubt be intrigued by the recent purchase of shares by Ronald Andrews, CEO, President & Director of the company, who spent a stonking US$43m on stock at an average price of US$2,372. Aside from being a solid chunk in its own right, the deft move also saw their holding increase by some 40%.
See our latest analysis for OncoCyte
OncoCyte Insider Transactions Over The Last Year
In fact, the recent purchase by Ronald Andrews was the biggest purchase of OncoCyte 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 US$2.10). 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. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
OncoCyte insiders may have bought shares in the last year, but they didn’t sell any. They paid about US$372 on average. I’d consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by 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!
OncoCyte is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of OncoCyte
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that OncoCyte insiders own 13% of the company, worth about US$17m. 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 OncoCyte Insiders?
It’s certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But we don’t feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest OncoCyte insiders are well aligned, and that they may think the share price is too low. 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. You’d be interested to know, that we found 3 warning signs for OncoCyte and we suggest you have a look.
But note: OncoCyte may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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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