Design Therapeutics Gains 11%, Insider Trades Reap Benefit

Design Therapeutics, Inc. (NASDAQ:DSGN) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 11%, resulting in a US$36m rise in the company's market capitalisation, translating to a gain of 79% on their initial investment. As a result, their original purchase of US$104.6k worth of stock is now worth US$187.1k.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Design Therapeutics

The Last 12 Months Of Insider Transactions At Design Therapeutics

The Independent Director John Schmid made the biggest insider purchase in the last 12 months. That single transaction was for US$100k worth of shares at a price of US$3.74 each. We do like to see buying, but this purchase was made at well below the current price of US$6.62. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While Design Therapeutics insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Design 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

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Design Therapeutics insiders own 16% of the company, worth about US$58m. 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 Does This Data Suggest About Design Therapeutics Insiders?

The fact that there have been no Design Therapeutics insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Design Therapeutics and their transactions don't cause us concern. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To help with this, we've discovered 4 warning signs (2 are a bit unpleasant!) that you ought to be aware of before buying any shares in Design Therapeutics.

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.