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

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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Chimerix, Inc. (NASDAQ:CMRX).

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’

Check out our latest analysis for Chimerix

The Last 12 Months Of Insider Transactions At Chimerix

CEO, President & Director Michael Sherman made the biggest insider purchase in the last 12 months. That single transaction was for US$104k worth of shares at a price of US$3.48 each. So it’s clear an insider wanted to buy, at around the current price, which is US$3.50. 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. In this case we’re pleased to report that the insider purchases were made at close to current prices.

In the last twelve months insiders paid US$302k for 88000 shares purchased. In the last twelve months Chimerix insiders were buying shares, but not selling. 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:CMRX Recent Insider Trading, May 31st 2019
NasdaqGM:CMRX Recent Insider Trading, May 31st 2019

Chimerix is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at Chimerix Have Bought Stock Recently

Over the last quarter, Chimerix insiders have spent a meaningful amount on shares. Overall, three insiders shelled out US$257k for shares in the company — and none sold. This makes one think the business has some good points.

Does Chimerix 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. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own US$3.0m worth of Chimerix stock, about 1.7% of the company. We consider this fairly low insider ownership.

So What Do The Chimerix Insider Transactions Indicate?

It’s certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But we don’t feel the same about the fact the company is making losses. While the overall levels of insider ownership are below what we’d like to see, the history of transactions imply that Chimerix insiders are reasonably well aligned, and optimistic for the future. Of course, the future is what matters most. So if you are interested in Chimerix, you should check out this free report on analyst forecasts for the company.

Of course Chimerix may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.