Insider Purchases Worth US$1.10m See Losses As Relmada Therapeutics Market Value Drops To US$20m

The recent 10% drop in Relmada Therapeutics, Inc.'s (NASDAQ:RLMD) stock could come as a blow to insiders who purchased US$1.10m worth of stock at an average buy price of US$0.91 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$738.3k which is not ideal.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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Relmada Therapeutics Insider Transactions Over The Last Year

The CEO & Director Sergio Traversa made the biggest insider purchase in the last 12 months. That single transaction was for US$395k worth of shares at a price of US$2.99 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$0.61). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Relmada Therapeutics insiders may have bought shares in the last year, but they didn't sell any. They paid about US$0.91 on average. This is nice to see since it implies that insiders might see value around current prices. The chart below shows insider transactions (by companies and individuals) 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!

Check out our latest analysis for Relmada Therapeutics

Relmada Therapeutics is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At Relmada Therapeutics Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Relmada Therapeutics. In total, insiders bought US$461k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. 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 Relmada Therapeutics insiders own about US$2.2m worth of shares (which is 11% of the company). But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Relmada Therapeutics Insiders?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Relmada Therapeutics insiders are expecting a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Relmada Therapeutics has 6 warning signs (and 4 which can't be ignored) we think you should know about.

But note: Relmada 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.