PLx Pharma Inc.'s (NASDAQ:PLXP) recent US$9.0m market cap decline means a loss of US$31k for insiders who bought this year

Published
June 14, 2022
NasdaqCM:PLXP
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The recent price decline of 15% in PLx Pharma Inc.'s (NASDAQ:PLXP) stock may have disappointed insiders who bought US$65k worth of shares at an average price of US$3.66 in the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$34k.

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 PLx Pharma

PLx Pharma Insider Transactions Over The Last Year

The CFO and Head of Manufacturing & Supply Chain Rita O'Connor made the biggest insider purchase in the last 12 months. That single transaction was for US$50k worth of shares at a price of US$3.66 each. That means that an insider was happy to buy shares at above the current price of US$1.90. 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 generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

PLx 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NasdaqCM:PLXP Insider Trading Volume June 14th 2022

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

PLx Pharma Insiders Bought Stock Recently

It's good to see that PLx Pharma insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought US$65k worth of shares. This could be interpreted as suggesting a positive outlook.

Insider Ownership of PLx Pharma

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. Our data indicates that PLx Pharma insiders own about US$3.2m worth of shares (which is 6.2% of the company). Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About PLx Pharma Insiders?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that PLx Pharma insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing PLx Pharma. When we did our research, we found 5 warning signs for PLx Pharma (1 doesn't sit too well with us!) that we believe deserve your full attention.

But note: PLx Pharma 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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