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We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell TFF Pharmaceuticals, Inc. (NASDAQ:TFFP), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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'.
The Last 12 Months Of Insider Transactions At TFF Pharmaceuticals
The Independent Chairman of the Board Aaron Fletcher made the biggest insider purchase in the last 12 months. That single transaction was for US$102k worth of shares at a price of US$5.08 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$15.57. 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.
Aaron Fletcher bought a total of 54.08k shares over the year at an average price of US$5.52. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
TFF Pharmaceuticals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at TFF Pharmaceuticals Have Sold Stock Recently
We have seen a bit of insider selling at TFF Pharmaceuticals, over the last three months. US$86k worth of shares were sold by Independent Director Ralph Thurman. But US$76k was spent on buying, too, . While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.
For a common shareholder, it is worth checking how many shares are held by company 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. TFF Pharmaceuticals insiders own about US$23m worth of shares. That equates to 6.6% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About TFF Pharmaceuticals Insiders?
Insider sales and purchases have netted out over the last three months, so it's hard to draw any conclusion from recent trading. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think TFF Pharmaceuticals insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing TFF Pharmaceuticals. While conducting our analysis, we found that TFF Pharmaceuticals has 2 warning signs and it would be unwise to ignore these.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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