It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Obalon Therapeutics, Inc. (NASDAQ:OBLN).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
See our latest analysis for Obalon Therapeutics
The Last 12 Months Of Insider Transactions At Obalon Therapeutics
Executive Chairman of the Board Andrew Rasdal made the biggest insider purchase in the last 12 months. That single transaction was for US$200k worth of shares at a price of US$1.82 each. So it's clear an insider wanted to buy, at around the current price. Of course they may have changed their mind. But this suggests they are optimistic. Nonetheless, we consider it positive if insiders want to buy at around the current share price.
Happily, we note that in the last year insiders bought 556.97k shares for a total of US$1.1m. Overall, Obalon Therapeutics insiders were net buyers last year. They paid about US$1.96 on average. Although they bought at below the recent price of US$2.00 per share, it is good to see that insiders are willing to invest in the company. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Obalon Therapeutics better if I see some big insider buys. While we wait, check out this freelist of growing companies with considerable, recent, insider buying.
Insider Ownership of Obalon Therapeutics
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 our data, it seems that Obalon Therapeutics insiders own 8.3% of the company, worth about US$3.8m. But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Do The Obalon Therapeutics Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if Obalon Therapeutics insiders bought more shares in the company. Of course, the future is what matters most. So if you are interested in Obalon Therapeutics, you should check out this freereport on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist of interesting companies.
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