Insider Purchases Worth US$5.17m See Losses As Terns Pharmaceuticals Market Value Drops To US$255m

Insiders who bought US$5.17m worth of Terns Pharmaceuticals, Inc.'s (NASDAQ:TERN) stock at an average buy price of US$10.25 over the last year may be disappointed by the recent 17% decrease in the stock. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$1.47m, which is not great.

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.

The Last 12 Months Of Insider Transactions At Terns Pharmaceuticals

In the last twelve months, the biggest single purchase by an insider was when Independent Director Hongbo Lu bought US$5.0m worth of shares at a price of US$10.50 per share. That means that an insider was happy to buy shares at above the current price of US$2.92. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Over the last year, we can see that insiders have bought 503.98k shares worth US$5.2m. But they sold 24.99k shares for US$155k. In the last twelve months there was more buying than selling by Terns Pharmaceuticals 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 Terns Pharmaceuticals

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).

Insiders At Terns Pharmaceuticals Have Sold Stock Recently

The last three months saw significant insider selling at Terns Pharmaceuticals. Specifically, insiders ditched US$108k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests Terns Pharmaceuticals insiders own 0.8% of the company, worth about US$1.9m. We prefer to see high levels of insider ownership.

What Might The Insider Transactions At Terns Pharmaceuticals Tell Us?

Insiders sold Terns Pharmaceuticals shares recently, but they didn't buy any. In contrast, they appear keener if you look at the last twelve months. But we'd like it if insiders owned more stock, overall. So we can't be sure that insiders are optimistic. 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. Every company has risks, and we've spotted 5 warning signs for Terns Pharmaceuticals (of which 3 are potentially serious!) you should know about.

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.