Insiders who bought stock earlier this year lose -US$84k as Vallon Pharmaceuticals, Inc. (NASDAQ:VLON) drops to US$3.8m

The recent 20% drop in Vallon Pharmaceuticals, Inc.'s (NASDAQ:VLON) stock could come as a blow to insiders who purchased US$97k worth of stock at an average buy price of US$4.08 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$13k which is not ideal.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Vallon Pharmaceuticals

The Last 12 Months Of Insider Transactions At Vallon Pharmaceuticals

In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director Joseph Payne bought US$72k worth of shares at a price of US$4.50 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$0.56). It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.

While Vallon Pharmaceuticals insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

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.

Insider Ownership of Vallon Pharmaceuticals

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Vallon Pharmaceuticals insiders own about US$696k worth of shares. That equates to 18% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Vallon Pharmaceuticals Insiders?

It doesn't really mean much that no insider has traded Vallon Pharmaceuticals shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Vallon Pharmaceuticals and their transactions don't cause us concern. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we've found that Vallon Pharmaceuticals has 5 warning signs (4 can't be ignored!) that deserve your attention before going any further with your analysis.

Of course Vallon Pharmaceuticals may not be the best stock to buy. So you may wish to see this free collection of high quality 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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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.