Hopeful Week For Insiders Who Bought US$3.46m Of CervoMed Stock
Insiders who purchased US$3.46m worth of CervoMed Inc. (NASDAQ:CRVO) shares over the past year recouped some of their losses after price gained 18% last week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at US$448k since the time of purchase.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At CervoMed
Over the last year, we can see that the biggest insider purchase was by Independent Chair of the Board Joshua Boger for US$3.0m worth of shares, at about US$3.14 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$2.97). 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months CervoMed insiders were buying shares, but not selling. 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!
See our latest analysis for CervoMed
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does CervoMed Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. CervoMed insiders own about US$12m worth of shares. That equates to 26% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At CervoMed Tell Us?
The fact that there have been no CervoMed insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think CervoMed insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing CervoMed. Every company has risks, and we've spotted 6 warning signs for CervoMed (of which 4 are potentially serious!) you should know about.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 of direct interests only, but not derivative transactions or indirect interests.
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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.