Insiders who acquired US$658k worth of Erasca, Inc.'s (NASDAQ:ERAS) stock at an average price of US$4.38 in the past 12 months may be dismayed by the recent 8.4% price decline. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$572k which is not ideal.

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.

Check out our latest analysis for Erasca

Erasca Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Co-Founder Jonathan Lim for US$231k worth of shares, at about US$3.86 per share. That means that an insider was happy to buy shares at above the current price of US$3.81. 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 generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Erasca insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around US$4.38. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Erasca is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders At Erasca Have Bought Stock Recently

Over the last quarter, Erasca insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$658k worth of shares. This could be interpreted as suggesting a positive outlook.

Insider Ownership Of Erasca

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Erasca insiders own about US$130m worth of shares (which is 23% of the company). 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 Erasca Tell Us?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Erasca. That's what I like to see! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Erasca. Case in point: We've spotted 5 warning signs for Erasca you should be aware of, and 2 of them don't sit too well with us.

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, 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.