Are Insiders Buying Cyclerion Therapeutics, Inc. (NASDAQ:CYCN) Stock?
We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Cyclerion Therapeutics, Inc. (NASDAQ:CYCN).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Check out our latest analysis for Cyclerion Therapeutics
Cyclerion Therapeutics Insider Transactions Over The Last Year
President & Chief Scientific Officer Mark Currie made the biggest insider purchase in the last 12 months. That single transaction was for US$4.0m worth of shares at a price of US$14.81 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$2.64). 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. We note that Mark Currie was both the biggest buyer and the biggest seller.
Happily, we note that in the last year insiders paid US$4.2m for 395.11k shares. But they sold 50000 shares for US$126k. Overall, Cyclerion Therapeutics insiders were net buyers last year. Their average price was about US$10.70. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Cyclerion Therapeutics Insiders Are Selling The Stock
The last three months saw significant insider selling at Cyclerion Therapeutics. In total, President & Chief Scientific Officer Mark Currie sold US$126k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does Cyclerion Therapeutics Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Based on our data, Cyclerion Therapeutics insiders have about 2.7% of the stock, worth approximately US$2.0m. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Cyclerion Therapeutics Tell Us?
An insider sold stock recently, but they haven't been buying. On the other hand, the insider transactions over the last year are encouraging. But we'd like it if insiders owned more stock, overall. So the company doesn't look great on this analysis. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Cyclerion Therapeutics. To that end, you should learn about the 6 warning signs we've spotted with Cyclerion Therapeutics (including 1 which makes us a bit uncomfortable).
But note: Cyclerion 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
