Insider Buyers Lose US$455k As Hydration Pharmaceuticals Sheds AU$915k

Insiders who bought US$585.0k worth of The Hydration Pharmaceuticals Company Limited's (ASX:HPC) stock at an average buy price of US$0.045 over the last year may be disappointed by the recent 23% decrease in the stock. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$130.0k, which is not great.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Hydration Pharmaceuticals

Hydration Pharmaceuticals Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Geoffrey O'Brien for AU$500k worth of shares, at about AU$0.045 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.01). Their view may have changed since then, but at least it shows they felt optimistic at the time. 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.

Hydration Pharmaceuticals insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Hydration Pharmaceuticals insiders own about AU$444k worth of shares. That equates to 16% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Hydration Pharmaceuticals Tell Us?

It doesn't really mean much that no insider has traded Hydration Pharmaceuticals shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Hydration Pharmaceuticals and their transactions don't cause us concern. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 6 warning signs with Hydration Pharmaceuticals and understanding these should be part of your investment process.

Of course Hydration 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. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com