Insiders Of Recce Pharmaceuticals Are Up 73% On Their AU$6.19m Purchase

Last week, Recce Pharmaceuticals Ltd (ASX:RCE) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 15% last week, resulting in a AU$19m increase in the company's market worth, implying a 73% gain on their initial purchase. Put another way, the original AU$6.19m acquisition is now worth AU$10.7m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Recce Pharmaceuticals

The insider Gavin Brown made the biggest insider purchase in the last 12 months. That single transaction was for AU$5.0m worth of shares at a price of AU$0.28 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.49. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Recce Pharmaceuticals insiders may have bought shares in the last year, but they didn't sell any. 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!

Check out our latest analysis for Recce 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.

Insider Ownership Of Recce Pharmaceuticals

Many investors like to check how much of a company is owned by 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. Insiders own 39% of Recce Pharmaceuticals shares, worth about AU$55m. 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 Recce Pharmaceuticals Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Recce Pharmaceuticals and their transactions don't cause us concern. 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. For example, Recce Pharmaceuticals has 7 warning signs (and 3 which make us uncomfortable) we think you should know about.

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.

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.