Bullish ESSA Pharma Insiders Loaded Up On US$1.19m Of Stock
It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in ESSA Pharma Inc.'s (NASDAQ:EPIX) case, it's fantastic news for shareholders.
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.
View our latest analysis for ESSA Pharma
ESSA Pharma Insider Transactions Over The Last Year
The Independent Director, Franklin Berger, made the biggest insider sale in the last 12 months. That single transaction was for US$729k worth of shares at a price of US$3.00 each. That means that an insider was selling shares at slightly below the current price (US$5.46). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 29% of Franklin Berger's holding. The only individual insider seller over the last year was Franklin Berger. Notably Franklin Berger was also the biggest buyer, having purchased US$1.2m worth of shares.
Over the last year, we can see that insiders have bought 232.47k shares worth US$1.2m. But they sold 272.84k shares for US$729k. In total, ESSA Pharma insiders bought more than they sold over the last year. Their average price was about US$5.11. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders At ESSA Pharma Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at ESSA Pharma. We can see that Independent Director Franklin Berger paid US$1.1m for shares in the company. No-one sold. That shows some optimism about the company's future.
Insider Ownership Of ESSA Pharma
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that ESSA Pharma insiders own 2.3% of the company, worth about US$5.6m. We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About ESSA Pharma Insiders?
It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on ESSA Pharma stock. 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. To that end, you should learn about the 4 warning signs we've spotted with ESSA Pharma (including 2 which are a bit concerning).
But note: ESSA Pharma 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.
