Have Insiders Been Buying Flexion Therapeutics, Inc. (NASDAQ:FLXN) Shares?
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 Flexion Therapeutics, Inc. (NASDAQ:FLXN).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.
See our latest analysis for Flexion Therapeutics
Flexion Therapeutics Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Co-Founder Michael Clayman bought US$100k worth of shares at a price of US$9.75 per share. That implies that an insider found the current price of US$11.98 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Flexion Therapeutics share holders is that insiders were buying at near the current price.
In the last twelve months Flexion Therapeutics insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Flexion Therapeutics 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.
Does Flexion Therapeutics Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Flexion Therapeutics insiders own about US$15m worth of shares. That equates to 2.6% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Flexion Therapeutics Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Flexion Therapeutics shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Flexion Therapeutics and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Flexion Therapeutics. At Simply Wall St, we found 1 warning sign for Flexion Therapeutics that deserve your attention before buying any shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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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