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 before you buy or sell ESSA Pharma Inc. (CVE:EPI), 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, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.
The Last 12 Months Of Insider Transactions At ESSA Pharma
In the last twelve months, the biggest single purchase by an insider was when Independent Director Franklin Berger bought CA$72k worth of shares at a price of CA$4.83 per share. Even though the purchase was made at a significantly lower price than the recent price (CA$6.75), we still think insider buying is a positive. 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 ESSA Pharma insiders were buying shares, but not selling. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
ESSA Pharma is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
ESSA Pharma Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at ESSA Pharma. Overall, two insiders shelled out CA$174k for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership of ESSA Pharma
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. Our data suggests ESSA Pharma insiders own 4.3% of the company, worth about CA$6.1m. We prefer to see high levels of insider ownership.
So What Does This Data Suggest About ESSA Pharma Insiders?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that ESSA Pharma insiders are expecting a bright future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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