Bullish Silverback Therapeutics, Inc. (NASDAQ:SBTX) investors are yet to receive a pay off on their US$2.5m bet

By
Simply Wall St
Published
November 23, 2021
NasdaqGM:SBTX
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The recent price decline of 16% in Silverback Therapeutics, Inc.'s (NASDAQ:SBTX) stock may have disappointed insiders who bought US$2.5m worth of shares at an average price of US$21.00 in 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$856k 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.

See our latest analysis for Silverback Therapeutics

The Last 12 Months Of Insider Transactions At Silverback Therapeutics

In the last twelve months, the biggest single purchase by an insider was when Independent Director Jonathan Root bought US$2.0m worth of shares at a price of US$21.00 per share. That means that even when the share price was higher than US$7.32 (the recent price), an insider wanted to purchase shares. 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.

While Silverback Therapeutics insiders bought shares during the last year, they didn't sell. 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!

insider-trading-volume
NasdaqGM:SBTX Insider Trading Volume November 23rd 2021

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Silverback Therapeutics Boast High Insider Ownership?

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Silverback Therapeutics insiders own 5.0% of the company, worth about US$13m. 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 Silverback Therapeutics Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Silverback Therapeutics 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 Silverback Therapeutics and their transactions don't cause us concern. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 4 warning signs for Silverback Therapeutics (2 are a bit unpleasant!) and we strongly recommend you look at these before investing.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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, but not derivative transactions.

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.

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