Rain Therapeutics Inc. (NASDAQ:RAIN) is up 11%, but insiders still continue to see a loss of US$1.6m on their US$2.2m investment
Insiders who bought US$2.2m worth of Rain Therapeutics Inc. (NASDAQ:RAIN) stock in the last year have seen some of their losses recouped as the stock gained 11% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$1.6m since the time of purchase.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Rain Therapeutics
The Last 12 Months Of Insider Transactions At Rain Therapeutics
Over the last year, we can see that the biggest insider purchase was by Independent Director Franklin Berger for US$2.1m worth of shares, at about US$17.00 per share. That means that even when the share price was higher than US$4.77 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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. Franklin Berger was the only individual insider to buy during the last year.
Franklin Berger bought 128.79k shares over the last 12 months at an average price of US$16.87. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Rain Therapeutics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Rain Therapeutics
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 15% of Rain Therapeutics shares, worth about US$18m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Rain Therapeutics Insider Transactions Indicate?
The fact that there have been no Rain Therapeutics insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Rain Therapeutics insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 3 warning signs for Rain Therapeutics (1 makes us a bit uncomfortable!) and we strongly recommend you look at them before investing.
But note: Rain Therapeutics 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.
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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.
