It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Concert Pharmaceuticals, Inc. (NASDAQ:CNCE).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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 Concert Pharmaceuticals
In the last twelve months, the biggest single purchase by an insider was when Co-Founder & Chairman of the Board Richard Aldrich bought US$591k worth of shares at a price of US$12.00 per share. That means that an insider was happy to buy shares at around the current price. 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 any event it’s generally a positive if insiders are buying shares at around the current price.
Over the last year, we can see that insiders have bought 52.00k shares worth US$615k. Overall, Concert Pharmaceuticals insiders were net buyers last year. They paid about US$11.82 on average. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (US$12.18). You can see the insider transactions over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders at Concert Pharmaceuticals Have Bought Stock Recently
Over the last quarter, Concert Pharmaceuticals insiders have spent a meaningful amount on shares. In total, insiders bought US$615k worth of shares in that time, and we didn’t record any sales whatsoever. That shows some optimism about the company’s future.
Insider Ownership of Concert Pharmaceuticals
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. It’s great to see that Concert Pharmaceuticals insiders own 5.0% of the company, worth about US$14m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Concert Pharmaceuticals Tell Us?
The recent insider purchases are heartening. 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. Insiders likely see value in Concert Pharmaceuticals shares, given these transactions (along with notable insider ownership of the company). Of course, the future is what matters most. So if you are interested in Concert Pharmaceuticals, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.