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Should You Take Comfort From Insider Transactions At Galera Therapeutics, Inc. (NASDAQ:GRTX)?

·3 min read

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we'll take a look at whether insiders have been buying or selling shares in Galera Therapeutics, Inc. (NASDAQ:GRTX).

Do Insider Transactions Matter?

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, such insiders must disclose their trading activities, and not trade on inside information.

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. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

View our latest analysis for Galera Therapeutics

The Last 12 Months Of Insider Transactions At Galera Therapeutics

Notably, that recent purchase by Linda West is the biggest insider purchase of Galera Therapeutics shares that we've seen in the last year. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$8.58). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Galera Therapeutics insiders bought shares during the last year, they didn't sell. 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!

insider-trading-volume
insider-trading-volume

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Galera Therapeutics Insiders Bought Stock Recently

Over the last quarter, Galera Therapeutics insiders have spent a meaningful amount on shares. We can see that Independent Director Linda West paid US$173k for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.

Insider Ownership of Galera Therapeutics

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, Galera Therapeutics insiders have about 2.1% of the stock, worth approximately US$4.5m. I generally like to see higher levels of ownership.

What Might The Insider Transactions At Galera Therapeutics Tell Us?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. 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 Galera Therapeutics 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 Galera Therapeutics. To that end, you should learn about the 4 warning signs we've spotted with Galera Therapeutics (including 2 which shouldn't be ignored).

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.

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.

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