We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Concert Pharmaceuticals, Inc. (NASDAQ:CNCE), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
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.’
Concert Pharmaceuticals Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Co-Founder & Chairman of the Board Richard Aldrich for US$591k worth of shares, at about US$12.00 per share. That means that an insider was happy to buy shares 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 52.00k shares worth US$615k. In the last twelve months there was more buying than selling by Concert Pharmaceuticals insiders. They paid about US$11.82 on average. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (US$14.62). You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Concert Pharmaceuticals 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.
Insiders at Concert Pharmaceuticals Have Bought Stock Recently
Over the last quarter, Concert Pharmaceuticals insiders have spent a meaningful amount on shares. Overall, 2 insiders shelled out US$615k for shares in the company — and none sold. That shows some optimism about the company’s future.
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Concert Pharmaceuticals insiders own 5.0% of the company, worth about US$16m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Concert Pharmaceuticals Insider Transactions Indicate?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Concert Pharmaceuticals we think they are probably pretty confident of a bright future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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 email@example.com.