Favourable Signals For Starpharma Holdings: Numerous Insiders Acquired Stock

Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Starpharma Holdings Limited (ASX:SPL), it sends a favourable message to the company's shareholders.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Starpharma Holdings

Starpharma Holdings Insider Transactions Over The Last Year

In fact, the recent purchase by Jeff Davies was the biggest purchase of Starpharma Holdings shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at around the current price of AU$0.096. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider purchases were made at close to current prices.

In the last twelve months Starpharma Holdings insiders were buying shares, but not selling. 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!

Starpharma Holdings is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At Starpharma Holdings Have Bought Stock Recently

Over the last quarter, Starpharma Holdings insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought AU$205k worth of shares. This makes one think the business has some good points.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From looking at our data, insiders own AU$1.8m worth of Starpharma Holdings stock, about 4.4% of the company. I generally like to see higher levels of ownership.

So What Do The Starpharma Holdings Insider Transactions Indicate?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Starpharma Holdings insiders are reasonably well aligned, and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 2 warning signs (1 shouldn't be ignored!) that you ought to be aware of before buying any shares in Starpharma Holdings.

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.

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