Who Has Been Buying Chinook Therapeutics, Inc. (NASDAQ:KDNY) Shares?
We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Chinook Therapeutics, Inc. (NASDAQ:KDNY), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
See our latest analysis for Chinook Therapeutics
Chinook Therapeutics Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by President Eric Dobmeier for US$62k worth of shares, at about US$13.86 per share. So it's clear an insider wanted to buy, at around the current price, which is US$16.14. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider bought shares at close to current prices. The only individual insider to buy over the last year was Eric Dobmeier.
Eric Dobmeier bought 10.50k shares over the last 12 months at an average price of US$13.52. 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!
Chinook Therapeutics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Chinook Therapeutics Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Chinook Therapeutics insiders own 10% of the company, worth about US$69m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Chinook Therapeutics Tell Us?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Chinook Therapeutics shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Chinook Therapeutics has 3 warning signs (and 1 which doesn't sit too well with us) we think you should know about.
But note: Chinook Therapeutics 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.
This article by Simply Wall St is general in nature. 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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