Insiders In Prothena Still Down 30% On US$2.75m Investment

Insiders who purchased US$2.75m worth of Prothena Corporation plc (NASDAQ:PRTA) shares over the past year recouped some of their losses after price gained 16% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$817k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Prothena

In the last twelve months, the biggest single purchase by an insider was when insider William Scully bought US$2.7m worth of shares at a price of US$15.91 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$9.32). 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. William Scully was the only individual insider to buy shares in the last twelve months.

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!

View our latest analysis for Prothena

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 Prothena

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Prothena insiders own 19% of the company, worth about US$86m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Prothena Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Prothena shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Prothena and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Prothena. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Prothena.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.