As Cabaletta Bio, Inc. (NASDAQ:CABA) hits US$104m market cap, insiders may be dismayed about not purchasing higher quantities
Cabaletta Bio, Inc. (NASDAQ:CABA) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 65%, resulting in a US$41m rise in the company's market capitalisation. As a result, the stock they originally bought for US$344k is now worth US$1.2m.
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.
View our latest analysis for Cabaletta Bio
The Last 12 Months Of Insider Transactions At Cabaletta Bio
Over the last year, we can see that the biggest insider purchase was by Co-Founder Steven Nichtberger for US$141k worth of shares, at about US$0.99 per share. Even though the purchase was made at a significantly lower price than the recent price (US$3.57), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Cabaletta Bio insiders may have bought shares in the last year, but they didn't sell any. 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!
Cabaletta Bio 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.
Insiders At Cabaletta Bio Have Bought Stock Recently
It's good to see that Cabaletta Bio insiders have made notable investments in the company's shares. In total, insiders bought US$344k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
Does Cabaletta Bio Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 5.4% of Cabaletta Bio shares, worth about US$5.6m, according to our data. We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About Cabaletta Bio Insiders?
The recent insider purchases are heartening. 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. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Cabaletta Bio insiders are reasonably well aligned, and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that Cabaletta Bio has 5 warning signs (3 are a bit concerning!) that deserve your attention before going any further with your analysis.
But note: Cabaletta Bio 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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