Yahoo Finance Insiders who purchased Graphite Bio, Inc. (NASDAQ:GRPH) earlier this year lose an additional US$64k as the stock sinks to US$6.16
Insiders who acquired US$100k worth of Graphite Bio, Inc.'s (NASDAQ:GRPH) stock at an average price of US$17.00 in the past 12 months may be dismayed by the recent 22% price decline. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$36k.
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.
Check out our latest analysis for Graphite Bio
The Last 12 Months Of Insider Transactions At Graphite Bio
In the last twelve months, the biggest single purchase by an insider was when Independent Director Smital Shah bought US$100k worth of shares at a price of US$17.00 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$6.16). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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. Smital Shah was the only individual insider to buy shares in the last twelve months.
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!
Graphite Bio 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.
Insider Ownership
Many investors like to check how much of a company is owned by 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. It appears that Graphite Bio insiders own 9.5% of the company, worth about US$34m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Graphite Bio Insiders?
It doesn't really mean much that no insider has traded Graphite Bio shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in Graphite Bio and we see no evidence to suggest they are worried about 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. Our analysis shows 4 warning signs for Graphite Bio (2 are concerning!) and we strongly recommend you look at these before investing.
But note: Graphite Bio 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.
