We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in Proteostasis Therapeutics Inc (NASDAQ:PTI).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Proteostasis Therapeutics
Director Franklin Berger made the biggest insider purchase in the last 12 months. That single transaction was for US$300k worth of shares at a price of US$5.00 each. That implies that an insider found the current (approximate) price enticing. 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. Nonetheless, we consider it positive if insiders want to buy at around the current share price.
Happily, we note that in the last year insiders bought 144.00k shares for a total of US$790k. Overall, Proteostasis Therapeutics insiders were net buyers last year. They paid about US$5.49 on average. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (US$5.49). The chart below shows insider transactions over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders at Proteostasis Therapeutics Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Proteostasis Therapeutics. We can see that Franklin Berger paid US$270k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.
Insider Ownership of Proteostasis Therapeutics
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Based on our data, Proteostasis Therapeutics insiders have about 0.9% of the stock, worth approximately US$2.5m. I generally like to see higher levels of ownership.
So What Does This Data Suggest About Proteostasis Therapeutics Insiders?
The recent insider purchase is heartening. 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 Proteostasis Therapeutics stock. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Proteostasis Therapeutics.
Of course Proteostasis Therapeutics may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.