Amylyx Pharmaceuticals, Inc.'s (NASDAQ:AMLX) value has fallen 16% in the last week, but insiders who sold US$765k worth of stock over the last year have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of US$8.10 is still lower than the current share price.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Amylyx Pharmaceuticals Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Chairman of the Board George Milne bought US$220k worth of shares at a price of US$2.20 per share. We do like to see buying, but this purchase was made at well below the current price of US$4.51. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Happily, we note that in the last year insiders paid US$497k for 199.00k shares. But they sold 94.40k shares for US$765k. All up, insiders sold more shares in Amylyx Pharmaceuticals than they bought, over the last year. They sold for an average price of about US$8.10. We are not joyful about insider selling. However, we do note that the average sale price was significantly higher than the current share price (which is US$4.51). The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Insiders At Amylyx Pharmaceuticals Have Sold Stock Recently
Over the last three months, we've seen notably more insider selling, than insider buying, at Amylyx Pharmaceuticals. In that time, insiders dumped US$213k worth of shares. Meanwhile Chief Financial Officer James Frates bought US$101k worth. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Amylyx Pharmaceuticals insiders own 10% of the company, worth about US$34m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Amylyx Pharmaceuticals Insiders?
Unfortunately, there has been more insider selling of Amylyx Pharmaceuticals stock, than buying, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 3 warning signs for Amylyx Pharmaceuticals that deserve your attention before buying any shares.
But note: Amylyx 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 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.
