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Have Insiders Been Buying Obalon Therapeutics, Inc. (NASDAQ:OBLN) Shares?

Simply Wall St

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Obalon Therapeutics, Inc. (NASDAQ:OBLN).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.

Check out our latest analysis for Obalon Therapeutics

Obalon Therapeutics Insider Transactions Over The Last Year

President William Plovanic made the biggest insider purchase in the last 12 months. That single transaction was for US$108k worth of shares at a price of US$1.66 each. That implies that an insider found the current price of US$1.79 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Obalon Therapeutics insiders decided to buy shares at close to current prices.

In the last twelve months Obalon Therapeutics insiders were buying shares, but not selling. The average buy price was around US$2.86. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

NasdaqGM:OBLN Recent Insider Trading, January 13th 2020

Obalon 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.

Insiders at Obalon Therapeutics Have Bought Stock Recently

It's good to see that Obalon Therapeutics insiders have made notable investments in the company's shares. Specifically, President William Plovanic bought US$108k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.

Does Obalon Therapeutics Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own US$564k worth of Obalon Therapeutics stock, about 4.1% of the company. We consider this fairly low insider ownership.

What Might The Insider Transactions At Obalon Therapeutics Tell Us?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Obalon Therapeutics insiders are expecting a bright future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Obalon Therapeutics.

Of course Obalon Therapeutics 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.

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.