It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Cyclerion Therapeutics, Inc. (NASDAQ:CYCN), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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'.
Cyclerion Therapeutics Insider Transactions Over The Last Year
The Chief Scientific Officer Andreas Busch made the biggest insider purchase in the last 12 months. That single transaction was for US$316k worth of shares at a price of US$2.53 each. Even though the purchase was made at a significantly lower price than the recent price (US$3.84), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
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!
Cyclerion Therapeutics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Cyclerion Therapeutics Have Sold Stock Recently
The last quarter saw substantial insider selling of Cyclerion Therapeutics shares. In total, Chair of Scientific Advisory Board Mark Currie sold US$61k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Does Cyclerion Therapeutics Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests Cyclerion Therapeutics insiders own 2.7% of the company, worth about US$3.6m. We prefer to see high levels of insider ownership.
So What Does This Data Suggest About Cyclerion Therapeutics Insiders?
An insider sold Cyclerion Therapeutics shares recently, but they didn't buy any. In contrast, they appear keener if you look at the last twelve months. Still, insiders don't own a great deal of the stock. So the company doesn't look great on this analysis. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 7 warning signs for Cyclerion Therapeutics (2 are potentially serious!) that we believe deserve your full attention.
But note: Cyclerion Therapeutics may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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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Cyclerion Therapeutics, Inc., a clinical-stage biopharmaceutical company, engages in the discovering, development, and commercialization of medicines for serious central nervous system (CNS) diseases.
Adequate balance sheet with weak fundamentals.