Possible turnaround for Cortexyme, Inc. (NASDAQ:CRTX) insiders, still down US$1.8m after a US$3.5m shopping spree
Insiders who bought US$3.5m worth of Cortexyme, Inc. (NASDAQ:CRTX) stock in the last year recovered part of their losses as the stock rose by 15% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$1.8m since the time of purchase.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Cortexyme
Cortexyme Insider Transactions Over The Last Year
The Independent Director David Lamond made the biggest insider purchase in the last 12 months. That single transaction was for US$1.8m worth of shares at a price of US$36.86 each. That means that even when the share price was higher than US$16.40 (the recent price), an insider wanted to purchase shares. 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. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. David Lamond was the only individual insider to buy shares in the last twelve months.
David Lamond bought a total of 100.00k shares over the year at an average price of US$34.56. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
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. We usually like to see fairly high levels of insider ownership. Cortexyme insiders own about US$159m worth of shares (which is 33% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Cortexyme Insider Transactions Indicate?
The fact that there have been no Cortexyme insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Cortexyme insiders think the business has merit. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. When we did our research, we found 4 warning signs for Cortexyme (2 can't be ignored!) that we believe deserve your full attention.
But note: Cortexyme may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.
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.
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