Have Insiders Been Buying Chiasma, Inc. (NASDAQ:CHMA) Shares?
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Chiasma, Inc. (NASDAQ:CHMA), 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. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
See our latest analysis for Chiasma
The Last 12 Months Of Insider Transactions At Chiasma
Over the last year, we can see that the biggest insider purchase was by Independent Director Scott Minick for US$51k worth of shares, at about US$5.33 per share. That means that even when the share price was higher than US$4.57 (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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Chiasma insiders may have bought shares in the last year, but they didn't sell any. Their average price was about US$4.74. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Chiasma 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.
Insiders at Chiasma Have Bought Stock Recently
We saw some Chiasma insider buying shares in the last three months. CEO & Director Raj Kannan shelled out US$42k for shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Insider Ownership of Chiasma
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Based on our data, Chiasma insiders have about 0.4% of the stock, worth approximately US$1.2m. We prefer to see high levels of insider ownership.
So What Do The Chiasma Insider Transactions Indicate?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Chiasma insiders are doubting the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 2 warning signs for Chiasma you should be aware of.
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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