U.S. markets open in 3 hours 2 minutes
  • S&P Futures

    3,703.75
    +33.75 (+0.92%)
     
  • Dow Futures

    29,547.00
    +204.00 (+0.70%)
     
  • Nasdaq Futures

    11,449.75
    +133.50 (+1.18%)
     
  • Russell 2000 Futures

    1,680.10
    +17.60 (+1.06%)
     
  • Crude Oil

    77.81
    +1.10 (+1.43%)
     
  • Gold

    1,641.30
    +7.90 (+0.48%)
     
  • Silver

    18.61
    +0.13 (+0.70%)
     
  • EUR/USD

    0.9632
    +0.0020 (+0.21%)
     
  • 10-Yr Bond

    3.8780
    0.0000 (0.00%)
     
  • Vix

    31.58
    +1.66 (+5.55%)
     
  • GBP/USD

    1.0814
    +0.0130 (+1.22%)
     
  • USD/JPY

    144.2800
    -0.4000 (-0.28%)
     
  • BTC-USD

    20,228.84
    +1,112.77 (+5.82%)
     
  • CMC Crypto 200

    461.70
    +28.60 (+6.60%)
     
  • FTSE 100

    6,991.80
    -29.15 (-0.42%)
     
  • Nikkei 225

    26,571.87
    +140.32 (+0.53%)
     

As Finch Therapeutics Group, Inc. (NASDAQ:FNCH) drops to US$103m market cap, insiders might rethink their US$650k stock purchase earlier this year

·3 min read

Insiders who acquired US$650k worth of Finch Therapeutics Group, Inc.'s (NASDAQ:FNCH) stock at an average price of US$10.18 in the past 12 months may be dismayed by the recent 14% price decline. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$139k, which is not great.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Finch Therapeutics Group

Finch Therapeutics Group Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Director Nicholas Haft for US$650k worth of shares, at about US$10.18 per share. That means that even when the share price was higher than US$2.17 (the recent price), an insider wanted to purchase shares. 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. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Nicholas Haft was the only individual insider to buy during the last year.

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!

insider-trading-volume
insider-trading-volume

Finch Therapeutics Group 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.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Finch Therapeutics Group insiders own 52% of the company, worth about US$53m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Finch Therapeutics Group Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Finch Therapeutics Group insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the 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. To help with this, we've discovered 3 warning signs (1 can't be ignored!) that you ought to be aware of before buying any shares in Finch Therapeutics Group.

Of course Finch Therapeutics Group 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, but not derivative transactions.

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

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here