Insiders Who Purchased US$783.7k Of Savara Stock May Not Have Expected 12% Tumble

The recent 12% drop in Savara Inc.'s (NASDAQ:SVRA) stock could come as a blow to insiders who purchased US$783.7k worth of stock at an average buy price of US$2.80 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$571.2k, which is not what they expected.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Savara

The Independent Director David Ramsay made the biggest insider purchase in the last 12 months. That single transaction was for US$416k worth of shares at a price of US$2.78 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$2.04). 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. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months insiders purchased 280.00k shares for US$784k. On the other hand they divested 87.70k shares, for US$291k. In the last twelve months there was more buying than selling by Savara insiders. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for Savara

Savara is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At Savara Have Bought Stock Recently

Over the last quarter, Savara insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$437k worth of shares. This makes one think the business has some good points.

Insider Ownership Of Savara

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. 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 Savara insiders own 2.1% of the company, worth about US$9.9m. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Savara Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Savara insiders are expecting a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Savara. When we did our research, we found 4 warning signs for Savara (1 is a bit unpleasant!) that we believe deserve your full attention.

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.