Having purchased US$806k worth of Vincerx, Inc. (NASDAQ:VINC) stock, the recent 21% pullback is not what insiders may have expected

By
Simply Wall St
Published
April 13, 2022
NasdaqCM:VINC
Source: Shutterstock

Insiders who acquired US$806k worth of Vincerx, Inc.'s (NASDAQ:VINC) stock at an average price of US$12.00 in the past 12 months may be dismayed by the recent 21% price decline. 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$205k, 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.

View our latest analysis for Vincerx

The Last 12 Months Of Insider Transactions At Vincerx

In the last twelve months, the biggest single purchase by an insider was when Director Andrew McDonald bought US$248k worth of shares at a price of US$12.38 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$3.05). 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.

Vincerx insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NasdaqCM:VINC Insider Trading Volume April 13th 2022

Vincerx is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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. It appears that Vincerx insiders own 19% of the company, worth about US$12m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Vincerx Tell Us?

The fact that there have been no Vincerx insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Vincerx and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Vincerx. At Simply Wall St, we've found that Vincerx has 4 warning signs (2 are potentially serious!) that deserve your attention before going any further with your analysis.

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, but not derivative transactions.

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