Need To Know: Soleno Therapeutics, Inc. (NASDAQ:SLNO) Insiders Have Been Buying Shares

It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Soleno Therapeutics, Inc. (NASDAQ:SLNO).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

View our latest analysis for Soleno Therapeutics

The Last 12 Months Of Insider Transactions At Soleno Therapeutics

The insider Jack Schuler made the biggest insider purchase in the last 12 months. That single transaction was for US$8.5m worth of shares at a price of US$1.65 each. That implies that an insider found the current price of US$1.98 per share to be enticing. 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. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Soleno Therapeutics insider decided to buy shares at close to current prices. Jack Schuler was the only individual insider to buy shares in the last twelve months.

The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Are Soleno Therapeutics Insiders Buying Or Selling?

In the last three months company Independent Director William Harris divested US$4.3k worth of stock. That is not a lot. The net selling is so small that it's hard to draw any conclusions from these recent transactions.

Does Soleno Therapeutics Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Soleno Therapeutics insiders own 16% of the company, worth about US$26m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Soleno Therapeutics Insiders?

Our data shows a little more insider selling, but no insider buying, in the last three months. However, the sales are not big enough to concern us at all. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Soleno Therapeutics and we see no evidence to suggest they are worried about the future. 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. When we did our research, we found 2 warning signs for Soleno Therapeutics (1 is a bit concerning!) that we believe deserve your full attention.

But note: Soleno 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, but not derivative transactions.

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