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As Edesa Biotech, Inc. (NASDAQ:EDSA) gains 11%, insiders who bought last year may be wishing they had bet higher

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Edesa Biotech, Inc. (NASDAQ:EDSA) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 11%, resulting in a US$10m rise in the company's market capitalisation. As a result, the stock they originally bought for US$93k is now worth US$138k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Edesa Biotech

Edesa Biotech Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Director, Frank Oakes, for US$58k worth of shares, at about US$7.25 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$7.67. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was 100% of Frank Oakes's stake. The only individual insider seller over the last year was Frank Oakes.

In the last twelve months insiders purchased 18.00k shares for US$93k. But they sold 7.99k shares for US$58k. In the last twelve months there was more buying than selling by Edesa Biotech insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!


Edesa Biotech is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Edesa Biotech Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 21% of Edesa Biotech shares, worth about US$21m. 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 Edesa Biotech Insiders?

The fact that there have been no Edesa Biotech insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Edesa Biotech insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that Edesa Biotech has 4 warning signs (2 are potentially serious!) that deserve your attention before going any further with your analysis.

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. 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.

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