Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Merrimack Pharmaceuticals, Inc. (NASDAQ:MACK), that sends out a positive message to the company's shareholders.
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.
The Last 12 Months Of Insider Transactions At Merrimack Pharmaceuticals
In the last twelve months, the biggest single purchase by an insider was when President Gary Crocker bought US$80k worth of shares at a price of US$6.20 per share. We do like to see buying, but this purchase was made at well below the current price of US$11.73. 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 purchased 111.66k shares for US$574k. But they sold 1.00k shares for US$3.8k. In the last twelve months there was more buying than selling by Merrimack Pharmaceuticals insiders. They paid about US$5.14 on average. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!
Merrimack Pharmaceuticals 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.
Insider Ownership Of Merrimack Pharmaceuticals
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Based on our data, Merrimack Pharmaceuticals insiders have about 1.3% of the stock, worth approximately US$2.0m. We prefer to see high levels of insider ownership.
So What Do The Merrimack Pharmaceuticals Insider Transactions Indicate?
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. The transactions are fine but it'd be more encouraging if Merrimack Pharmaceuticals insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Merrimack Pharmaceuticals. Case in point: We've spotted 2 warning signs for Merrimack Pharmaceuticals you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, 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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