Stock Analysis

Have Insiders Been Buying Cerecor Inc. (NASDAQ:CERC) Shares?

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NasdaqCM:AVTX
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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we'll take a look at whether insiders have been buying or selling shares in Cerecor Inc. (NASDAQ:CERC).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for Cerecor

Cerecor Insider Transactions Over The Last Year

The CEO, President & Director Michael Cola made the biggest insider purchase in the last 12 months. That single transaction was for US$250k worth of shares at a price of US$2.50 each. So it's clear an insider wanted to buy, at around the current price, which is US$2.71. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider purchases were made at close to current prices.

While Cerecor insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NasdaqCM:CERC Insider Trading Volume January 18th 2021

Cerecor 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.

Cerecor Insiders Bought Stock Recently

There was some insider buying at Cerecor over the last quarter. Insiders purchased US$20k worth of shares in that period. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.

Does Cerecor Boast High Insider Ownership?

Many investors like to check how much of a company is owned by 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, Cerecor insiders have about 1.6% of the stock, worth approximately US$4.1m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. I generally like to see higher levels of ownership.

So What Do The Cerecor Insider Transactions Indicate?

Our data shows a little insider buying, but no selling, in the last three months. That said, the purchases were not large. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Cerecor insiders are doubting the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we've found that Cerecor has 4 warning signs (2 make us uncomfortable!) that deserve your attention before going any further with your analysis.

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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