Biohaven Insiders Placed Bullish Bets Worth US$42.4m

Multiple insiders secured a larger position in Biohaven Ltd. (NYSE:BHVN) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Biohaven

The Last 12 Months Of Insider Transactions At Biohaven

In the last twelve months, the biggest single purchase by an insider was when Independent Director John Childs bought US$10.0m worth of shares at a price of US$22.00 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$36.62. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months Biohaven insiders were buying shares, but not selling. Their average price was about US$27.85. To my mind it is good 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. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Biohaven Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Biohaven. In total, insiders bought US$4.5m worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.

Does Biohaven Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Biohaven insiders own 13% of the company, worth about US$404m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Biohaven Insiders?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Biohaven. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Biohaven. Case in point: We've spotted 3 warning signs for Biohaven you should be aware of, and 1 of these is a bit unpleasant.

But note: Biohaven 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.