As Cyclerion Therapeutics, Inc. (NASDAQ:CYCN) drops to US$26m market cap, insiders might rethink their US$2.7m stock purchase earlier this year
The recent 14% drop in Cyclerion Therapeutics, Inc.'s (NASDAQ:CYCN) stock could come as a blow to insiders who purchased US$2.7m worth of stock at an average buy price of US$3.28 over the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$489k.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Cyclerion Therapeutics
Cyclerion Therapeutics Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CEO, Interim CFO Peter Hecht bought US$2.7m worth of shares at a price of US$3.28 per share. That means that even when the share price was higher than US$0.59 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Peter Hecht was the only individual insider to buy during the last year.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
Does Cyclerion Therapeutics Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Our data suggests Cyclerion Therapeutics insiders own 4.4% of the company, worth about US$1.1m. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Cyclerion Therapeutics Tell Us?
It doesn't really mean much that no insider has traded Cyclerion Therapeutics shares in the last quarter. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Cyclerion Therapeutics insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Cyclerion Therapeutics. For example, Cyclerion Therapeutics has 7 warning signs (and 2 which shouldn't be ignored) we think you should know about.
But note: Cyclerion 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.