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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Applied Therapeutics, Inc. (NASDAQ:APLT), it sends a favourable message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Applied Therapeutics
In the last twelve months, the biggest single purchase by an insider was when Independent Director Stacy Kanter bought US$149k worth of shares at a price of US$22.86 per share. That means that an insider was happy to buy shares at above the current price of US$13.77. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Over the last year, we can see that insiders have bought 16.50k shares worth US$294k. But they sold 7.94k shares for US$161k. In total, Applied Therapeutics insiders bought more than they sold over the last year. The average buy price was around US$17.79. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Applied Therapeutics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Applied Therapeutics Have Bought Stock Recently
Over the last quarter, Applied Therapeutics insiders have spent a meaningful amount on shares. Specifically, Chair of the Board of Directors Shoshana Shendelman bought US$145k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
Does Applied Therapeutics Boast High Insider Ownership?
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. It appears that Applied Therapeutics insiders own 14% of the company, worth about US$54m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Applied Therapeutics Tell Us?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Applied Therapeutics we think they are probably pretty confident of a bright future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Be aware that Applied Therapeutics is showing 4 warning signs in our investment analysis, and 1 of those is a bit unpleasant...
Of course Applied Therapeutics may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
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.
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