Insider Purchases Worth US$3.19m See Losses As Greenwich LifeSciences Market Value Drops To US$151m

The recent 10% drop in Greenwich LifeSciences, Inc.'s (NASDAQ:GLSI) stock could come as a blow to insiders who purchased US$3.19m worth of stock at an average buy price of US$14.05 over the past 12 months. 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$2.48m, which is not what they expected.

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

See our latest analysis for Greenwich LifeSciences

Greenwich LifeSciences Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by CEO, CFO & Director Snehal Patel for US$2.5m worth of shares, at about US$14.30 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$10.91). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months Greenwich LifeSciences insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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 Greenwich LifeSciences Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Greenwich LifeSciences. Vice President Clinical & Regulatory Affairs Jaye Thompson shelled out US$13k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Greenwich LifeSciences insiders own about US$83m worth of shares (which is 55% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Greenwich LifeSciences Insider Transactions Indicate?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Greenwich LifeSciences insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 4 warning signs for Greenwich LifeSciences (2 can't be ignored!) and we strongly recommend you look at them before investing.

Of course Greenwich LifeSciences 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.