Valeo Pharma's Market Cap Drops To CA$8.9m Leaving Insiders With Losses

The recent price decline of 14% in Valeo Pharma Inc.'s (TSE:VPH) stock may have disappointed insiders who bought CA$1.20m worth of shares at an average price of CA$0.28 in the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth CA$385.4k, which is not what they expected.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Valeo Pharma

The Last 12 Months Of Insider Transactions At Valeo Pharma

The Chairman of the Board & Chairman of the Advisory Board Richard MacKay made the biggest insider purchase in the last 12 months. That single transaction was for CA$1.2m worth of shares at a price of CA$0.28 each. That means that even when the share price was higher than CA$0.09 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Valeo Pharma insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

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 Valeo Pharma insiders own 27% of the company, worth about CA$2.4m. 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 Valeo Pharma Tell Us?

It doesn't really mean much that no insider has traded Valeo Pharma shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Valeo Pharma and their transactions don't cause us concern. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 6 warning signs for Valeo Pharma (4 are a bit unpleasant!) that we believe deserve your full attention.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.