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Bullish insiders bet US$1.0m on Ardelyx, Inc. (NASDAQ:ARDX)

In the last year, multiple insiders have substantially increased their holdings of Ardelyx, Inc. (NASDAQ:ARDX) stock, indicating that insiders' optimism about the company's prospects has increased.

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.

Check out our latest analysis for Ardelyx

The Last 12 Months Of Insider Transactions At Ardelyx

The Independent Chairman of the Board David Mott made the biggest insider purchase in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$1.76 each. That implies that an insider found the current price of US$1.86 per share to be enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Ardelyx insiders decided to buy shares at close to current prices.

Over the last year, we can see that insiders have bought 585.00k shares worth US$1.0m. On the other hand they divested 486.60k shares, for US$346k. In total, Ardelyx insiders bought more than they sold over the last year. 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!

insider-trading-volume
insider-trading-volume

Ardelyx is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Ardelyx Insiders Bought Stock Recently

At Ardelyx,over the last quarter, we have observed quite a lot more insider buying than insider selling. We can see that Independent Chairman of the Board David Mott paid US$1.0m for shares in the company. But we did see insider selling worth US$33k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Ardelyx insiders own about US$8.4m worth of shares (which is 2.4% of the company). Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Ardelyx Tell Us?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Ardelyx insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Ardelyx. To help with this, we've discovered 3 warning signs (2 are significant!) that you ought to be aware of before buying any shares in Ardelyx.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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