Prelude Therapeutics Insiders Enjoying US$203k Appreciation On US$876.2k Investment

Last week, Prelude Therapeutics Incorporated (NASDAQ:PRLD) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 10% last week, resulting in a US$5.0m increase in the company's market worth, implying a 23% gain on their initial purchase. Put another way, the original US$876.2k acquisition is now worth US$1.08m.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Prelude Therapeutics Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Founder Krishna Vaddi bought US$467k worth of shares at a price of US$0.69 per share. Even though the purchase was made at a significantly lower price than the recent price (US$0.94), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months Prelude Therapeutics insiders were buying shares, but not selling. The average buy price was around US$0.77. It is certainly positive to see that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for Prelude Therapeutics

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

Insider Ownership Of Prelude Therapeutics

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 7.9% of Prelude Therapeutics shares, worth about US$4.0m, according to our data. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Prelude Therapeutics Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Prelude Therapeutics insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Prelude Therapeutics. Every company has risks, and we've spotted 4 warning signs for Prelude Therapeutics (of which 2 can't be ignored!) you should know about.

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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.