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In the last year, multiple insiders have substantially increased their holdings of Liquidia Corporation (NASDAQ:LQDA) stock, indicating that insiders' optimism about the company's prospects has increased.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Liquidia Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director Paul Manning bought US$500k worth of shares at a price of US$2.52 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$4.18. 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.
Liquidia insiders may have bought shares in the last year, but they didn't sell any. Their average price was about US$3.03. It is certainly positive to see 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. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Liquidia is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Liquidia Have Bought Stock Recently
It's good to see that Liquidia insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought US$624k worth of shares. This is a positive in our book as it implies some confidence.
Does Liquidia 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. It appears that Liquidia insiders own 6.4% of the company, worth about US$14m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Liquidia Tell Us?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Liquidia shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Liquidia. At Simply Wall St, we found 3 warning signs for Liquidia that deserve your attention before buying any shares.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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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