Scilex Holding's Market Cap Up US$14m Following Year Of Insider Stock Buying

Last week, Scilex Holding Company (NASDAQ:SCLX) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 11% last week, resulting in a US$14m increase in the company's market worth, implying a 31% gain on their initial purchase. As a result, the stock they originally bought for US$186.0k is now worth US$243.4k.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Scilex Holding

Scilex Holding Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when President Jaisim Shah bought US$122k worth of shares at a price of US$0.92 per share. Even though the purchase was made at a significantly lower price than the recent price (US$1.15), 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.

Scilex Holding insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Scilex Holding 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Based on our data, Scilex Holding insiders have about 0.7% of the stock, worth approximately US$1.1m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We prefer to see high levels of insider ownership.

So What Do The Scilex Holding Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if Scilex Holding insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Scilex Holding. Case in point: We've spotted 3 warning signs for Scilex Holding you should be aware of, and 2 of them are concerning.

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 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.