Insiders Of Recce Pharmaceuticals Make A Tidy Sum Selling At AU$0.40

Although Recce Pharmaceuticals Ltd (ASX:RCE) shareholders have enjoyed a great week with the stock up 10%, insiders who sold stock over the past year haven't fared as well. Had they waited, they might have been able to sell their stock at much higher prices and thereby received a better value on their investment.

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 Recce Pharmaceuticals

The Last 12 Months Of Insider Transactions At Recce Pharmaceuticals

The Chief Scientific Director & Executive Director, Michele Dilizia, made the biggest insider sale in the last 12 months. That single transaction was for AU$335k worth of shares at a price of AU$0.40 each. That means that an insider was selling shares at slightly below the current price (AU$0.55). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 24% of Michele Dilizia's holding. Michele Dilizia was the only individual insider to sell over the last year.

In the last twelve months insiders purchased 490.51k shares for AU$216k. But they sold 836.41k shares for AU$335k. The chart below shows insider transactions (by companies and individuals) over the last year. 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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Does Recce Pharmaceuticals Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company 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 Recce Pharmaceuticals insiders own 28% of the company, worth about AU$35m. 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 Does This Data Suggest About Recce Pharmaceuticals Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Still, the insider transactions at Recce Pharmaceuticals in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Recce Pharmaceuticals is showing 6 warning signs in our investment analysis, and 2 of those are potentially serious...

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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.