It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Melinta Therapeutics, Inc. (NASDAQ:MLNT), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Melinta Therapeutics Insider Transactions Over The Last Year
The insider, John Johnson, made the biggest insider sale in the last 12 months. That single transaction was for US$72k worth of shares at a price of US$5.57 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$3.81. So it may not shed much light on insider confidence at current levels. John Johnson was the only individual insider to sell shares in the last twelve months.
The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Melinta Therapeutics
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 information indicates that Melinta Therapeutics insiders own about US$191k worth of shares. We might be missing something but that seems like very low insider ownership.
What Might The Insider Transactions At Melinta Therapeutics Tell Us?
The fact that there have been no Melinta Therapeutics insider transactions recently certainly doesn't bother us. The insider transactions at Melinta Therapeutics are not inspiring us to buy. And usually insiders own more stock in the company, according to our data. Of course, the future is what matters most. So if you are interested in Melinta Therapeutics, you should check out this free report on analyst forecasts for the company.
But note: Melinta 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Thank you for reading.