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Trade Alert: The Independent Chairman Of AcelRx Pharmaceuticals, Inc. (NASDAQ:ACRX), Adrian Adams, Has Just Spent US$129k Buying 133% More Shares

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Simply Wall St
·3 min read
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Investors who take an interest in AcelRx Pharmaceuticals, Inc. (NASDAQ:ACRX) should definitely note that the Independent Chairman, Adrian Adams, recently paid US$1.29 per share to buy US$129k worth of the stock. We reckon that's a good sign, especially since the purchase boosted their holding by 133%.

Check out our latest analysis for AcelRx Pharmaceuticals

The Last 12 Months Of Insider Transactions At AcelRx Pharmaceuticals

Notably, that recent purchase by Adrian Adams is the biggest insider purchase of AcelRx Pharmaceuticals shares that we've seen in the last year. That implies that an insider found the current price of US$1.43 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for AcelRx Pharmaceuticals share holders is that insiders were buying at near the current price.

In the last twelve months AcelRx Pharmaceuticals insiders were buying shares, but not selling. They paid about US$1.48 on average. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

NasdaqGM:ACRX Recent Insider Trading June 17th 2020
NasdaqGM:ACRX Recent Insider Trading June 17th 2020

AcelRx Pharmaceuticals is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does AcelRx Pharmaceuticals Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data suggests AcelRx Pharmaceuticals insiders own 1.5% of the company, worth about US$1.8m. I generally like to see higher levels of ownership.

So What Do The AcelRx Pharmaceuticals Insider Transactions Indicate?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that AcelRx Pharmaceuticals insiders are reasonably well aligned, and optimistic for the future. 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. For example, AcelRx Pharmaceuticals has 4 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

But note: AcelRx Pharmaceuticals 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. 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. Thank you for reading.