Insider Sales At Sagimet Biosciences Landed A Good Price

While it’s been a great week for Sagimet Biosciences Inc. (NASDAQ:SGMT) shareholders after stock gained 11%, company insiders might have missed out on those gains after selling stock earlier this year. Had they waited, they might have been able to sell their stock at much higher prices and thereby received a better value on their investment.

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.

Check out our latest analysis for Sagimet Biosciences

The Last 12 Months Of Insider Transactions At Sagimet Biosciences

In the last twelve months, the biggest single purchase by an insider was when CEO, President & Director David Happel bought US$64k worth of shares at a price of US$5.27 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$3.42). 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. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. David Happel was the only individual insider to buy shares in the last twelve months.

All up, insiders sold more shares in Sagimet Biosciences than they bought, over the last year. 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!

I will like Sagimet Biosciences better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Sagimet Biosciences Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Sagimet Biosciences. Specifically, insiders ditched US$103k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Sagimet Biosciences 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. Sagimet Biosciences insiders own about US$12m worth of shares. That equates to 11% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Sagimet Biosciences Tell Us?

Insiders sold Sagimet Biosciences shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Be aware that Sagimet Biosciences is showing 6 warning signs in our investment analysis, and 1 of those is potentially serious...

But note: Sagimet Biosciences 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com