Yahoo Finance Black Diamond Therapeutics, Inc.'s (NASDAQ:BDTX) recent US$17m market cap decline means a loss of US$21k for insiders who bought this year
Insiders who bought US$61k worth of Black Diamond Therapeutics, Inc.'s (NASDAQ:BDTX) stock at an average buy price of US$2.44 over the last year may be disappointed by the recent 23% decrease in the stock. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$40k, which is not what they expected.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Black Diamond Therapeutics
The Last 12 Months Of Insider Transactions At Black Diamond Therapeutics
The CFO, Principal Financial Officer and Chief Business Officer Fang Ni made the biggest insider purchase in the last 12 months. That single transaction was for US$61k worth of shares at a price of US$2.44 each. That means that an insider was happy to buy shares at above the current price of US$1.59. 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. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Fang Ni was the only individual insider to buy shares in the last twelve months.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership Of Black Diamond Therapeutics
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. Based on our data, Black Diamond Therapeutics insiders have about 3.6% of the stock, worth approximately US$2.1m. We prefer to see high levels of insider ownership.
So What Do The Black Diamond Therapeutics Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Black Diamond Therapeutics shares in the last quarter. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Black Diamond Therapeutics 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. When we did our research, we found 5 warning signs for Black Diamond Therapeutics (2 don't sit too well with us!) that we believe deserve your full attention.
But note: Black Diamond Therapeutics 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, 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.
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