Summit Therapeutics Inc. (NASDAQ:SMMT) shareholders (or potential shareholders) will be happy to see that the Co-CEO & Executive Chairman, Robert Duggan, recently bought a whopping US$75m worth of stock, at a price of US$22.70. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 0.6%.

Summit Therapeutics Insider Transactions Over The Last Year

Notably, that recent purchase by Robert Duggan is the biggest insider purchase of Summit Therapeutics shares that we've seen in the last year. Even though the purchase was made at a significantly lower price than the recent price (US$31.93), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Summit Therapeutics insiders may have bought shares in the last year, but they didn't sell any. They paid about US$12.61 on average. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Does Summit Therapeutics Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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's great to see that Summit Therapeutics insiders own 80% of the company, worth about US$19b. 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 Summit Therapeutics Tell Us?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Summit Therapeutics. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Summit Therapeutics. Every company has risks, and we've spotted 4 warning signs for Summit Therapeutics (of which 3 make us uncomfortable!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.