Insiders might want to re-evaluate their US$1m stock purchase as Janux Therapeutics, Inc. (NASDAQ:JANX) drops to US$570m

By
Simply Wall St
Published
April 13, 2022
NasdaqGM:JANX
Source: Shutterstock

The recent price decline of 8.2% in Janux Therapeutics, Inc.'s (NASDAQ:JANX) stock may have disappointed insiders who bought US$1m worth of shares at an average price of US$17.00 in the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$812k, which is not great.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Janux Therapeutics

The Last 12 Months Of Insider Transactions At Janux Therapeutics

The insider Klaus Dorner made the biggest insider purchase in the last 12 months. That single transaction was for US$1m worth of shares at a price of US$17.00 each. That means that even when the share price was higher than US$13.81 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Klaus Dorner was the only individual insider to buy during the last year.

The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NasdaqGM:JANX Insider Trading Volume April 13th 2022

Janux Therapeutics is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. We usually like to see fairly high levels of insider ownership. Insiders own 16% of Janux Therapeutics shares, worth about US$90m. 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 Janux Therapeutics Insider Transactions Indicate?

The fact that there have been no Janux Therapeutics insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Janux Therapeutics and their transactions don't cause us concern. 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. For instance, we've identified 4 warning signs for Janux Therapeutics (1 is potentially serious) you should be aware of.

But note: Janux 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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