Yahoo Finance Insiders at Erasca, Inc. (NASDAQ:ERAS) recouped some losses this week after buying this year, still down US$111k
Some of the losses seen by insiders who purchased US$242k worth of Erasca, Inc. (NASDAQ:ERAS) shares over the past year were recovered after the stock increased by 5.6% over the past week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$111k since the time of purchase.
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.
Check out our latest analysis for Erasca
The Last 12 Months Of Insider Transactions At Erasca
The Independent Director Pratik Multani made the biggest insider purchase in the last 12 months. That single transaction was for US$99k worth of shares at a price of US$16.00 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$8.63). 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. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Erasca insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Erasca is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. Erasca insiders own about US$291m worth of shares (which is 28% 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.
So What Does This Data Suggest About Erasca Insiders?
The fact that there have been no Erasca insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like Erasca insiders think the business has merit. 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. For example, Erasca has 4 warning signs (and 2 which are concerning) we think you should know about.
Of course Erasca may not be the best stock to buy. So you may wish to see this free collection of high quality 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.
