Positive Signs As Multiple Insiders Buy Societal CDMO Stock
Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Societal CDMO, Inc. (NASDAQ:SCTL), it sends a favourable message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Societal CDMO
Societal CDMO Insider Transactions Over The Last Year
Notably, that recent purchase by J. Enloe is the biggest insider purchase of Societal CDMO 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$0.55. 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 Societal CDMO insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Societal CDMO is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders At Societal CDMO Have Bought Stock Recently
It's good to see that Societal CDMO insiders have made notable investments in the company's shares. In total, insiders bought US$162k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.
Insider Ownership Of Societal CDMO
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests Societal CDMO insiders own 1.7% of the company, worth about US$955k. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. I generally like to see higher levels of ownership.
So What Does This Data Suggest About Societal CDMO 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. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Societal CDMO insiders are reasonably well aligned, and optimistic for the 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. For instance, we've identified 5 warning signs for Societal CDMO (2 shouldn't be ignored) you should be aware of.
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.
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.
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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.
