DiaMedica Therapeutics Insiders Land Bargain With Gains Of US$26m

Insiders who bought DiaMedica Therapeutics Inc. (NASDAQ:DMAC) in the last 12 months may probably not pay attention to the stock's recent 11% drop. After taking the recent loss into consideration, the US$43.1m worth of stock they bought is now worth US$69.3m, indicating that their investment yielded a positive return.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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DiaMedica Therapeutics Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Thomas von Koch for US$10.0m worth of shares, at about US$3.50 per share. Even though the purchase was made at a significantly lower price than the recent price (US$6.22), 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.

DiaMedica Therapeutics insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around US$3.87. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. You can see the insider transactions (by companies and 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!

See our latest analysis for DiaMedica Therapeutics

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insiders At DiaMedica Therapeutics Have Bought Stock Recently

Over the last quarter, DiaMedica Therapeutics insiders have spent a meaningful amount on shares. Specifically, insider Jan Stahlberg bought US$9.9m worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

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. It's great to see that DiaMedica Therapeutics insiders own 48% of the company, worth about US$165m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At DiaMedica Therapeutics Tell Us?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest DiaMedica Therapeutics insiders are well aligned, and quite possibly think the share price is too low. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing DiaMedica Therapeutics. At Simply Wall St, we've found that DiaMedica Therapeutics has 4 warning signs (2 can't be ignored!) that deserve your attention before going any further with your analysis.

Of course DiaMedica Therapeutics may not be the best stock to buy. So you may wish to see this free collection of high quality 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.