Insiders sitting comfortably on a US$923k profit after buying DiaMedica Therapeutics Inc. (NASDAQ:DMAC) stock worth US$4.5m last year

Insiders who bought DiaMedica Therapeutics Inc. (NASDAQ:DMAC) in the last 12 months may probably not pay attention to the stock's recent 20% drop. After taking the recent loss into consideration, the US$4.5m worth of stock they bought is now worth US$5.4m, 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.

View our latest analysis for DiaMedica Therapeutics

DiaMedica Therapeutics Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Thomas von Koch bought US$3.5m worth of shares at a price of US$1.24 per share. We do like to see buying, but this purchase was made at well below the current price of US$1.51. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Happily, we note that in the last year insiders paid US$4.5m for 3.57m shares. But insiders sold 2.86m shares worth US$3.5m. In total, DiaMedica Therapeutics insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that DiaMedica Therapeutics insiders own 38% of the company, worth about US$15m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The DiaMedica Therapeutics Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in DiaMedica Therapeutics and their transactions don't cause us concern. 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. To that end, you should learn about the 2 warning signs we've spotted with DiaMedica Therapeutics (including 1 which is a bit unpleasant).

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.

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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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.