Verrica Pharmaceuticals Inc. (NASDAQ:VRCA) insiders recover some losses but still US$354k away from matching original investment
Insiders who bought US$468k worth of Verrica Pharmaceuticals Inc. (NASDAQ:VRCA) stock in the last year have seen some of their losses recouped as the stock gained 14% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$354k since the time of purchase.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for Verrica Pharmaceuticals
The Last 12 Months Of Insider Transactions At Verrica Pharmaceuticals
The Chairman of the Board Paul Manning made the biggest insider purchase in the last 12 months. That single transaction was for US$468k worth of shares at a price of US$9.45 each. That means that even when the share price was higher than US$2.27 (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. 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. Paul Manning was the only individual insider to buy shares in the last twelve months.
The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Verrica Pharmaceuticals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company 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. Verrica Pharmaceuticals insiders own 42% of the company, currently worth about US$26m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Verrica Pharmaceuticals Tell Us?
It doesn't really mean much that no insider has traded Verrica Pharmaceuticals shares in the last quarter. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Verrica Pharmaceuticals insiders think the business has merit. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 5 warning signs for Verrica Pharmaceuticals (2 are concerning) you should be aware of.
But note: Verrica 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. 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.
