Insiders who purchased this year lose US$36k as Ocuphire Pharma, Inc. (NASDAQ:OCUP) stock drops to US$3.53

By
Simply Wall St
Published
November 17, 2021
NasdaqCM:OCUP
Source: Shutterstock

Insiders who acquired US$151k worth of Ocuphire Pharma, Inc.'s (NASDAQ:OCUP) stock at an average price of US$4.64 in the past 12 months may be dismayed by the recent 13% price decline. 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$115k, 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, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Ocuphire Pharma

The Last 12 Months Of Insider Transactions At Ocuphire Pharma

In the last twelve months, the biggest single purchase by an insider was when insider Susan Benton bought US$91k worth of shares at a price of US$4.57 per share. That means that an insider was happy to buy shares at above the current price of US$3.53. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Ocuphire Pharma insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NasdaqCM:OCUP Insider Trading Volume November 18th 2021

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Ocuphire Pharma Insiders Bought Stock Recently

Over the last quarter, Ocuphire Pharma insiders have spent a meaningful amount on shares. Overall, two insiders shelled out US$151k for shares in the company -- and none sold. This makes one think the business has some good points.

Insider Ownership of Ocuphire Pharma

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Ocuphire Pharma insiders own 10% of the company, worth about US$6.2m. But they may have an indirect interest through a corporate structure that we haven't picked up on. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Ocuphire Pharma Insider Transactions Indicate?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Ocuphire Pharma stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 4 warning signs we've spotted with Ocuphire Pharma (including 2 which make us uncomfortable).

Of course Ocuphire Pharma 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, but not derivative transactions.

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