Potential Tricida, Inc. (NASDAQ:TCDA) shareholders may wish to note that the CFO & Executive VP, Geoffrey Parker, recently bought US$147k worth of stock, paying US$29.46 for each share. Although the purchase only increased their holding by 2.6%, it is still a solid purchase in our view.
The Last 12 Months Of Insider Transactions At Tricida
Notably, that recent purchase by CFO & Executive VP Geoffrey Parker was not the only time they bought Tricida shares this year. Earlier in the year, they paid US$33.60 per share in a US$970k purchase. That means that an insider was happy to buy shares at above the current price of US$25.34. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Geoffrey Parker was the only individual insider to buy over the year.
Geoffrey Parker purchased 55.00k shares over the year. The average price per share was US$32.79. You can see a visual depiction of insider transactions (by 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!
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).
Does Tricida Boast High 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. Tricida insiders own about US$42m worth of shares. That equates to 3.3% of the company. 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 Does This Data Suggest About Tricida Insiders?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. Insiders likely see value in Tricida shares, given these transactions (along with notable insider ownership of the company). 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. Our analysis shows 3 warning signs for Tricida (1 can't be ignored!) and we strongly recommend you look at them before investing.
But note: Tricida 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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