Did Metacrine, Inc. (NASDAQ:MTCR) Insiders Buy Up More Shares?
We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Metacrine, Inc. (NASDAQ:MTCR), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
View our latest analysis for Metacrine
Metacrine Insider Transactions Over The Last Year
In fact, the recent purchase by Preston Klassen was the biggest purchase of Metacrine shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at around the current price of US$3.96. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Metacrine insiders decided to buy shares at close to current prices.
In the last twelve months Metacrine insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Metacrine is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Metacrine Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Metacrine. Not only was there no selling that we can see, but they collectively bought US$87k worth of shares. This is a positive in our book as it implies some confidence.
Does Metacrine 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Metacrine insiders own 5.9% of the company, worth about US$6.1m. Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At Metacrine Tell Us?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Metacrine 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 Metacrine. To help with this, we've discovered 2 warning signs (1 is potentially serious!) that you ought to be aware of before buying any shares in Metacrine.
But note: Metacrine 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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