Bullish insiders bet US$11m on Verrica Pharmaceuticals Inc. (NASDAQ:VRCA)
In the last year, multiple insiders have substantially increased their holdings of Verrica Pharmaceuticals Inc. (NASDAQ:VRCA) stock, indicating that insiders' optimism about the company's prospects has increased.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Verrica Pharmaceuticals
Verrica Pharmaceuticals Insider Transactions Over The Last Year
The Chairman of the Board Paul Manning made the biggest insider purchase in the last 12 months. That single transaction was for US$10.0m worth of shares at a price of US$2.10 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$2.75. 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 Verrica Pharmaceuticals insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Verrica Pharmaceuticals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
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. We usually like to see fairly high levels of insider ownership. Verrica Pharmaceuticals insiders own 40% of the company, currently worth about US$45m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Verrica Pharmaceuticals Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Verrica Pharmaceuticals shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Verrica Pharmaceuticals insiders feel good about the company's future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To help with this, we've discovered 3 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Verrica Pharmaceuticals.
But note: Verrica Pharmaceuticals 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, but not derivative transactions.
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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.
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