Island Pharmaceuticals Insiders Land Bargain With Gains Of AU$1.9m

Insiders who bought Island Pharmaceuticals Limited (ASX:ILA) stock lover the last 12 months are probably not as affected by last week’s 12% loss. Even after accounting for the recent loss, the AU$1.24m worth of stock purchased by them is now worth AU$3.17m or in other words, their investment continues to give good returns.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

The Last 12 Months Of Insider Transactions At Island Pharmaceuticals

In the last twelve months, the biggest single purchase by an insider was when insider William Garner bought AU$443k worth of shares at a price of AU$0.07 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.18), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Over the last year, we can see that insiders have bought 17.59m shares worth AU$1.2m. But insiders sold 3.77m shares worth AU$631k. Overall, Island Pharmaceuticals insiders were net buyers during the last year. 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!

See our latest analysis for Island Pharmaceuticals

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.

Island Pharmaceuticals Insiders Are Selling The Stock

We've seen more insider selling than insider buying at Island Pharmaceuticals recently. In total, insiders sold AU$467k worth of shares in that time. On the flip side, insiders spent AU$22k on purchasing shares. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.

Insider Ownership Of Island Pharmaceuticals

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Island Pharmaceuticals insiders own about AU$20m worth of shares (which is 46% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Island Pharmaceuticals Tell Us?

The stark truth for Island Pharmaceuticals is that there has been more insider selling than insider buying in the last three months. But we take heart from prior transactions. We are also comforted by the high levels of insider ownership. So the recent selling doesn't worry us. 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. Our analysis shows 6 warning signs for Island Pharmaceuticals (3 shouldn't be ignored!) and we strongly recommend you look at them before investing.

But note: Island Pharmaceuticals 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 of direct interests only, but not derivative transactions or indirect interests.

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

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.