Insiders' US$15.7m Investments In Red Following DiaMedica Therapeutics' US$13m Dip In Market Value

Insiders who acquired US$15.7m worth of DiaMedica Therapeutics Inc.'s (NASDAQ:DMAC) stock at an average price of US$3.42 in the past 12 months may be dismayed by the recent 11% price decline. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$13.0m, which is not what they expected.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for DiaMedica Therapeutics

The Last 12 Months Of Insider Transactions At DiaMedica Therapeutics

Over the last year, we can see that the biggest insider purchase was by insider Thomas von Koch for US$5.0m worth of shares, at about US$3.40 per share. That means that an insider was happy to buy shares at above the current price of US$2.83. 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. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While DiaMedica Therapeutics insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

DiaMedica Therapeutics is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. DiaMedica Therapeutics insiders own about US$40m worth of shares. That equates to 37% of the company. 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 Does This Data Suggest About DiaMedica Therapeutics Insiders?

It doesn't really mean much that no insider has traded DiaMedica Therapeutics shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in DiaMedica Therapeutics and we see no evidence to suggest they are worried about the future. 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. For example, DiaMedica Therapeutics has 4 warning signs (and 2 which can't be ignored) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.