Insiders may be rethinking their €1.3m Vivoryon Therapeutics N.V. (AMS:VVY) investment now that the company has lost €30m in value

By
Simply Wall St
Published
May 10, 2022
ENXTAM:VVY
Source: Shutterstock

Insiders who acquired €1.3m worth of Vivoryon Therapeutics N.V.'s (AMS:VVY) stock at an average price of €10.50 in the past 12 months may be dismayed by the recent 15% price decline. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only €996k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Vivoryon Therapeutics

The Last 12 Months Of Insider Transactions At Vivoryon Therapeutics

In the last twelve months, the biggest single purchase by an insider was when Chairperson of the Supervisory Board Erich Platzer bought €1.3m worth of shares at a price of €10.50 per share. That means that an insider was happy to buy shares at above the current price of €7.75. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Vivoryon Therapeutics 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!

insider-trading-volume
ENXTAM:VVY Insider Trading Volume May 10th 2022

Vivoryon Therapeutics is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders at Vivoryon Therapeutics Have Bought Stock Recently

It's good to see that Vivoryon Therapeutics insiders have made notable investments in the company's shares. Overall, two insiders shelled out €1.3m for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.

Does Vivoryon Therapeutics Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Vivoryon Therapeutics insiders own 6.3% of the company, worth about €11m. 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 Do The Vivoryon Therapeutics Insider Transactions Indicate?

The recent insider purchases are heartening. 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. Insiders likely see value in Vivoryon Therapeutics shares, given these transactions (along with notable insider ownership of the company). While we like knowing 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 4 warning signs for Vivoryon Therapeutics (1 is concerning!) and we strongly recommend you look at them before investing.

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, but not derivative transactions.

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