Independent Director of Biohaven John Childs Buys 52% More Shares

Biohaven Ltd. (NYSE:BHVN) shareholders (or potential shareholders) will be happy to see that the Independent Director, John Childs, recently bought a whopping US$25m worth of stock, at a price of US$7.50. That increased their holding by a full 52%, which arguably implies the sort of confidence required for a shy sweet-natured nerd to ask the most popular kid in the school to go out on a date.

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The Last 12 Months Of Insider Transactions At Biohaven

Notably, that recent purchase by John Childs is the biggest insider purchase of Biohaven shares that we've seen in the last year. We do like to see buying, but this purchase was made at well below the current price of US$9.45. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

While Biohaven insiders bought shares during the last year, they didn't sell. 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!

Check out our latest analysis for Biohaven

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

Does Biohaven Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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 appears that Biohaven insiders own 8.9% of the company, worth about US$97m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Biohaven Insider Transactions Indicate?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Biohaven insiders are well aligned, and that they may think the share price is too low. While it's good to be aware of 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. For instance, we've identified 5 warning signs for Biohaven (3 are potentially serious) you should be aware of.

Of course Biohaven 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 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.