Erasca Co-Founder Acquires 3.2% More Stock
Those following along with Erasca, Inc. (NASDAQ:ERAS) will no doubt be intrigued by the recent purchase of shares by Jonathan Lim, Co-Founder of the company, who spent a stonking US$1.7m on stock at an average price of US$1.70. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 3.2%.
See our latest analysis for Erasca
The Last 12 Months Of Insider Transactions At Erasca
In fact, the recent purchase by Co-Founder Jonathan Lim was not their only acquisition of Erasca shares this year. They previously made an even bigger purchase of US$2.0m worth of shares at a price of US$2.03 per share. That means that an insider was happy to buy shares at above the current price of US$1.96. 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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months Erasca insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Does Erasca 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. We usually like to see fairly high levels of insider ownership. Erasca insiders own about US$66m worth of shares. That equates to 23% 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 Do The Erasca Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Erasca shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Erasca. To that end, you should learn about the 3 warning signs we've spotted with Erasca (including 1 which can't be ignored).
Of course Erasca may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 of direct interests only, but not derivative transactions or indirect interests.
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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.
