Insiders who bought Nuvectis Pharma, Inc. (NASDAQ:NVCT) stock in the last 12 months were richly rewarded last week. The company's market value increased by US$82m as a result of the stock's 69% gain over the same period. Put another way, the original US$87.5k acquisition is now worth US$114.1k.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

The Last 12 Months Of Insider Transactions At Nuvectis Pharma

Over the last year, we can see that the biggest insider purchase was by Co-Founder Ron Bentsur for US$51k worth of shares, at about US$10.29 per share. That means that an insider was happy to buy shares at around the current price of US$10.81. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Nuvectis Pharma share holders is that insiders were buying at near the current price.

Over the last year, we can see that insiders have bought 10.55k shares worth US$88k. But they sold 2.76k shares for US$22k. Overall, Nuvectis Pharma insiders were net buyers during the last year. They paid about US$8.29 on average. We don't deny that it is nice to see insiders buying stock 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. 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 undervalued small cap companies that insiders are buying.

Nuvectis Pharma Insiders Are Selling The Stock

We have seen a bit of insider selling at Nuvectis Pharma, over the last three months. Vice President of Finance Michael Carson divested only US$22k worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the amount sold isn't enough for us to put any weight on it.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Nuvectis Pharma insiders own 64% of the company, currently worth about US$130m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Nuvectis Pharma Tell Us?

Our data shows a little more insider selling, but no insider buying, in the last three months. But given the selling was modest, we're not worried. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Nuvectis Pharma insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. While it's good to be aware of 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. Every company has risks, and we've spotted 4 warning signs for Nuvectis Pharma (of which 1 is concerning!) you should know about.

But note: Nuvectis 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.

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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.