Stock Analysis

Have Insiders Been Selling Iterum Therapeutics plc (NASDAQ:ITRM) Shares?

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NasdaqCM:ITRM
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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Iterum Therapeutics plc (NASDAQ:ITRM).

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

Check out our latest analysis for Iterum Therapeutics

The Last 12 Months Of Insider Transactions At Iterum Therapeutics

In fact, the recent sale by Corey Fishman was the biggest sale of Iterum Therapeutics shares made by an insider individual in the last twelve months, according to our records. So we know that an insider sold shares at around the present share price of US$1.49. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

Iterum Therapeutics insiders didn't buy any shares 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!

insider-trading-volume
NasdaqCM:ITRM Insider Trading Volume February 4th 2021

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders at Iterum Therapeutics Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Iterum Therapeutics. In total, insiders dumped US$264k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Iterum Therapeutics Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests Iterum Therapeutics insiders own 0.8% of the company, worth about US$1.0m. We prefer to see high levels of insider ownership.

What Might The Insider Transactions At Iterum Therapeutics Tell Us?

Insiders haven't bought Iterum Therapeutics stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. So we'd only buy after very careful consideration. While we like knowing 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. Be aware that Iterum Therapeutics is showing 7 warning signs in our investment analysis, and 4 of those are a bit concerning...

But note: Iterum Therapeutics may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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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What are the risks and opportunities for Iterum Therapeutics?

Iterum Therapeutics plc, a clinical-stage pharmaceutical company, engages in developing and commercializing anti-infectives in Ireland, Bermuda, and the United States.

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Rewards

  • Revenue is forecast to grow 75.6% per year

  • Earnings have grown 0.6% per year over the past 5 years

Risks

  • Earnings are forecast to decline by an average of 3.3% per year for the next 3 years

  • Makes less than USD$1m in revenue ($0)

  • Does not have a meaningful market cap ($18M)

  • Volatile share price over the past 3 months

  • Currently unprofitable and not forecast to become profitable over the next 3 years

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