Insider Spends US$70k Buying More Shares In Prelude Therapeutics

Whilst it may not be a huge deal, we thought it was good to see that the Prelude Therapeutics Incorporated (NASDAQ:PRLD) Founder, Krishna Vaddi, recently bought US$70k worth of stock, for US$0.71 per share. Although the purchase is not a big one, increasing their shareholding by only 4.3%, it can be interpreted as a good sign.

Check out our latest analysis for Prelude Therapeutics

Prelude Therapeutics Insider Transactions Over The Last Year

Notably, that recent purchase by Founder Krishna Vaddi was not the only time they bought Prelude Therapeutics shares this year. They previously made an even bigger purchase of US$99k worth of shares at a price of US$0.93 per share. That means that an insider was happy to buy shares at above the current price of US$0.71. 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. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Prelude Therapeutics insiders may have bought shares in the last year, but they didn't sell any. 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!

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Prelude Therapeutics is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Prelude Therapeutics

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Prelude Therapeutics insiders own 6.3% of the company, worth about US$2.6m. Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About Prelude Therapeutics Insiders?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. 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 Prelude Therapeutics stock. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 3 warning signs for Prelude Therapeutics (1 can't be ignored) you should be aware of.

But note: Prelude 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.