Insider Buying: Summit Therapeutics Co-CEO & Executive Chairman Bought US$75m Of Shares

Those following along with Summit Therapeutics Inc. (NASDAQ:SMMT) will no doubt be intrigued by the recent purchase of shares by Robert Duggan, Co-CEO & Executive Chairman of the company, who spent a stonking US$75m on stock at an average price of US$22.70. While that only increased their holding size by 0.6%, it is still a big swing by our standards.

View our latest analysis for Summit Therapeutics

Summit Therapeutics Insider Transactions Over The Last Year

In fact, the recent purchase by Robert Duggan was the biggest purchase of Summit Therapeutics shares made by an insider individual in the last twelve months, according to our records. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$31.93. 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.

Summit Therapeutics insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around US$12.61. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. 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 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).

Insider Ownership Of Summit Therapeutics

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Summit Therapeutics insiders own 80% of the company, worth about US$19b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Summit Therapeutics Tell Us?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Summit Therapeutics. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Summit Therapeutics has 4 warning signs (and 3 which are significant) we think you should know about.

But note: Summit 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 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.