Should You Take Comfort From Insider Transactions At ArQule, Inc. (NASDAQ:ARQL)?

We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in ArQule, Inc. (NASDAQ:ARQL).

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, rules govern insider transactions, and certain disclosures are required.

We don’t think shareholders should simply follow insider transactions. 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.’

See our latest analysis for ArQule

ArQule Insider Transactions Over The Last Year

Independent Director Ronald Lindsay made the biggest insider purchase in the last 12 months. That single transaction was for US$64k worth of shares at a price of US$2.67 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. In any event it’s generally a positive if insiders are buying shares at around the current price.

Over the last year, we can see that insiders have bought 64.16k shares worth US$190k. In the last twelve months there was more buying than selling by ArQule insiders. They paid about US$2.96 on average. Although they bought at below the recent price of US$3.19 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!

NasdaqGM:ARQL Insider Trading January 7th 19
NasdaqGM:ARQL Insider Trading January 7th 19

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of ArQule

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. Based on our data, ArQule insiders have about 1.2% of the stock, worth approximately US$4.1m. We prefer to see high levels of insider ownership.

What Might The Insider Transactions At ArQule Tell Us?

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 ArQule insiders bought more shares in the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for ArQule.

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

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.