We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Akari Therapeutics, Plc (NASDAQ:AKTX).
Do Insider Transactions Matter?
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.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
The Last 12 Months Of Insider Transactions At Akari Therapeutics
Over the last year, we can see that the biggest insider purchase was by Executive Chairman Ray Prudo for US$255k worth of shares, at about US$1.70 per share. So it's clear an insider wanted to buy, at around the current price, which is US$2.00. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Akari Therapeutics insider decided to buy shares at close to current prices. Ray Prudo was the only individual insider to buy during the last year.
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!
Akari Therapeutics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Akari Therapeutics
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. Insiders own 6.3% of Akari Therapeutics shares, worth about US$4.9m, according to our data. However, it's possible that insiders might have an indirect interest through a more complex structure. We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About Akari Therapeutics Insiders?
It doesn't really mean much that no insider has traded Akari Therapeutics shares in the last quarter. 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 Akari Therapeutics insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Akari Therapeutics. For instance, we've identified 4 warning signs for Akari Therapeutics (2 are potentially serious) you should be aware of.
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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This article by Simply Wall St is general in nature. 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.
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