Insiders who bought ESSA Pharma Inc. (NASDAQ:EPIX) stock lover the last 12 months are probably not as affected by last week's 12% loss. After accounting for the recent loss, the US$709.0k worth of shares they purchased is now worth US$1.15m, suggesting a good return on their investment.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

The Last 12 Months Of Insider Transactions At ESSA Pharma

Over the last year, we can see that the biggest insider purchase was by Independent Director Franklin Berger for US$420k worth of shares, at about US$5.99 per share. Even though the purchase was made at a significantly lower price than the recent price (US$8.68), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

ESSA Pharma insiders may have bought shares in the last year, but they didn't sell any. Their average price was about US$5.35. To my mind it is good 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. 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!

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

Insiders At ESSA Pharma Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at ESSA Pharma. President David Parkinson shelled out US$21k for shares in that time. We like it when there are only buyers, and no sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Does ESSA Pharma 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. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that ESSA Pharma insiders own 2.3% of the company, worth about US$8.7m. Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About ESSA Pharma Insiders?

Our data shows a little insider buying, but no selling, in the last three months. That said, the purchases were not large. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if ESSA Pharma insiders bought more shares in the company. 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. Every company has risks, and we've spotted 4 warning signs for ESSA Pharma (of which 2 don't sit too well with us!) you should know about.

But note: ESSA Pharma 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.