We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell ArQule, Inc. (NASDAQ:ARQL), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
ArQule Insider Transactions Over The Last Year
Independent Director Ronald Lindsay made the biggest insider purchase in the last 12 months. That single transaction was for US$64k worth of shares at a price of US$2.67 each. We do like to see buying, but this purchase was made at well below the current price of US$6.54. But because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
In the last twelve months insiders paid US$190k for 64157 shares purchased. ArQule may have bought shares in the last year, but they didn't sell any. Their average price was about US$2.96. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, 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 ArQule
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 1.4% of ArQule shares, worth about US$9.9m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About ArQule Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. We'd like to see bigger individual holdings. However, we don't see anything to make us think ArQule insiders are doubting the company. Of course, the future is what matters most. So if you are interested in ArQule, you should check out this free report on analyst forecasts for the company.
But note: ArQule 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.
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