Sagimet Biosciences Up 66%, Insiders Still Down After US$757.9k Purchase

Insiders who purchased US$757.9k worth of Sagimet Biosciences Inc. (NASDAQ:SGMT) shares over the past year recouped some of their losses after price gained 66% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$367k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Sagimet Biosciences

The Last 12 Months Of Insider Transactions At Sagimet Biosciences

The Independent Director Beth Seidenberg made the biggest insider purchase in the last 12 months. That single transaction was for US$750k worth of shares at a price of US$16.00 each. That means that even when the share price was higher than US$7.97 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

While Sagimet Biosciences 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. 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. 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).

Have Sagimet Biosciences Insiders Traded Recently?

There was some insider buying at Sagimet Biosciences over the last quarter. CEO, President & Director David Happel shelled out US$7.9k for shares in that time. It's great to see that insiders are only buying, not selling. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Insider Ownership Of Sagimet Biosciences

Many investors like to check how much of a company is owned by 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. From our data, it seems that Sagimet Biosciences insiders own 5.3% of the company, worth about US$9.7m. We do generally prefer see higher levels of insider ownership.

So What Do The Sagimet Biosciences Insider Transactions Indicate?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. The net investment is not enough to encourage us much. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it'd be more encouraging if Sagimet Biosciences insiders bought more shares in the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Our analysis shows 4 warning signs for Sagimet Biosciences (2 shouldn't be ignored!) and we strongly recommend you look at them before investing.

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.