Gossamer Bio, Inc. (NASDAQ:GOSS) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 22%, resulting in a US$56m rise in the company's market capitalisation, translating to a gain of 38% on their initial investment. As a result, the stock they originally bought for US$1.27m is now worth US$1.74m.
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.
The Last 12 Months Of Insider Transactions At Gossamer Bio
Over the last year, we can see that the biggest insider purchase was by Co-Founder Faheem Hasnain for US$1.0m worth of shares, at about US$1.20 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$1.41. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Happily, we note that in the last year insiders paid US$1.3m for 1.23m shares. But they sold 22.97k shares for US$26k. In the last twelve months there was more buying than selling by Gossamer Bio insiders. Their average price was about US$1.03. It is certainly positive to see that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
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. We usually like to see fairly high levels of insider ownership. Insiders own 3.0% of Gossamer Bio shares, worth about US$9.1m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About Gossamer Bio Insiders?
The fact that there have been no Gossamer Bio insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. We'd like to see bigger individual holdings. However, we don't see anything to make us think Gossamer Bio insiders are doubting the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For instance, we've identified 4 warning signs for Gossamer Bio (2 are a bit unpleasant) you should be aware of.
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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