Summit Therapeutics Insiders Up US$5.1m On US$5.05m Investment
Insiders who purchased Summit Therapeutics Inc. (NASDAQ:SMMT) shares in the past 12 months are unlikely to be deeply impacted by the stock's 27% decline over the past week. After accounting for the recent loss, the US$5.05m worth of shares they purchased is now worth US$10.1m, suggesting a good return on their investment.
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.
See our latest analysis for Summit Therapeutics
The Last 12 Months Of Insider Transactions At Summit Therapeutics
The COO & Director Manmeet Soni made the biggest insider purchase in the last 12 months. That single transaction was for US$5.0m worth of shares at a price of US$1.68 each. Even though the purchase was made at a significantly lower price than the recent price (US$3.37), we still think insider buying is a positive. 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.
While Summit Therapeutics insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) 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 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
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Summit Therapeutics insiders own 82% of the company, worth about US$1.9b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Summit Therapeutics Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Summit Therapeutics shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Summit Therapeutics insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 4 warning signs for Summit Therapeutics (of which 2 shouldn't be ignored!) you should know about.
But note: Summit 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 of direct interests only, but not derivative transactions or indirect interests.
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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.
