Journey Medical Corporation (NASDAQ:DERM) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 40%, resulting in a US$16m rise in the company's market capitalisation. As a result, their original purchase of US$289k worth of stock is now worth US$372k.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Journey Medical Insider Transactions Over The Last Year
Notably, that recent purchase by Lindsay Rosenwald is the biggest insider purchase of Journey Medical shares that we've seen in the last year. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$2.95. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
In the last twelve months insiders purchased 126.04k shares for US$289k. But insiders sold 82.08k shares worth US$131k. In the last twelve months there was more buying than selling by Journey Medical insiders. 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!
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).
Journey Medical Insiders Bought Stock Recently
There has been significantly more insider buying, than selling, at Journey Medical, over the last three months. In fact, two insiders bought US$289k worth of shares. But we did see insider selling worth US$44k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Does Journey Medical Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that Journey Medical insiders own about US$6.4m worth of shares (which is 12% of the company). We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About Journey Medical Insiders?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Journey Medical insiders are expecting a bright future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Be aware that Journey Medical is showing 5 warning signs in our investment analysis, and 2 of those can't be ignored...
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 of direct interests only, but not derivative transactions or indirect interests.
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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.