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Those following along with Global Blood Therapeutics, Inc. (NASDAQ:GBT) will no doubt be intrigued by the recent purchase of shares by Willie Brown, Director of the company, who spent a stonking US$524k on stock at an average price of US$52.37. Aside from being a solid chunk in its own right, the deft move also saw their holding increase by some 47%.
The Last 12 Months Of Insider Transactions At Global Blood Therapeutics
Notably, that recent purchase by Willie Brown is the biggest insider purchase of Global Blood Therapeutics shares that we've seen in the last year. That means that even when the share price was higher than US$47.21 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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. The only individual insider to buy over the last year was Willie Brown.
You can see the insider transactions (by 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!
Global Blood Therapeutics 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.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Global Blood Therapeutics insiders own about US$70m worth of shares. That equates to 2.4% 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.
What Might The Insider Transactions At Global Blood Therapeutics Tell Us?
It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss last year, which makes us a little cautious. Given that insiders also own a fair bit of Global Blood Therapeutics we think they are probably pretty confident of a bright 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. Case in point: We've spotted 3 warning signs for Global Blood Therapeutics you should be aware of.
But note: Global Blood 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.
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