Insiders purchases in Merrimack Pharmaceuticals, Inc. (NASDAQ:MACK) last year yet to pay off, remain down US$87k despite recent gains

By
Simply Wall St
Published
January 13, 2022
NasdaqGM:MACK
Source: Shutterstock

Insiders who bought US$233k worth of Merrimack Pharmaceuticals, Inc. (NASDAQ:MACK) stock in the last year have seen some of their losses recouped as the stock gained 13% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$87k.

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.

Check out our latest analysis for Merrimack Pharmaceuticals

The Last 12 Months Of Insider Transactions At Merrimack Pharmaceuticals

The President Gary Crocker made the biggest insider purchase in the last 12 months. That single transaction was for US$55k worth of shares at a price of US$6.47 each. That means that even when the share price was higher than US$4.31 (the recent price), an insider wanted to purchase shares. 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. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Gary Crocker.

Gary Crocker purchased 33.73k shares over the year. The average price per share was US$6.90. 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:MACK Insider Trading Volume January 13th 2022

Merrimack Pharmaceuticals 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.

Have Merrimack Pharmaceuticals Insiders Traded Recently?

In the last quarter Independent Director Russell Ray sold US$3.8k worth of equity. That's not a lot. Ultimately the overall selling isn't enough to tell us much.

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. We usually like to see fairly high levels of insider ownership. Our data isn't picking up on much insider ownership at Merrimack Pharmaceuticals, though insiders do hold about US$220k worth of shares. It's always possible we are missing something but from our data, it looks like insider ownership is minimal.

So What Does This Data Suggest About Merrimack Pharmaceuticals Insiders?

We did not see any insider buying in the last three months, but we did see selling. However, the sales are not big enough to concern us at all. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it'd be more encouraging if Merrimack Pharmaceuticals insiders bought more shares in the company. 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. Every company has risks, and we've spotted 2 warning signs for Merrimack Pharmaceuticals (of which 1 is potentially serious!) you should know about.

But note: Merrimack Pharmaceuticals 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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