The recent price decline of 14% in Fulcrum Therapeutics, Inc.'s (NASDAQ:FULC) stock may have disappointed insiders who bought US$492.0k worth of shares at an average price of US$11.35 in the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$130.3k.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Fulcrum Therapeutics
The CEO, President & Director Alexander Sapir made the biggest insider purchase in the last 12 months. That single transaction was for US$492k worth of shares at a price of US$11.35 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$3.01). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Alexander Sapir was the only individual insider to buy during the last year.
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!
Fulcrum Therapeutics is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insider Ownership Of Fulcrum Therapeutics
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. 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, Fulcrum Therapeutics insiders have about 1.6% of the stock, worth approximately US$2.9m. We consider this fairly low insider ownership.
So What Do The Fulcrum Therapeutics Insider Transactions Indicate?
The fact that there have been no Fulcrum Therapeutics insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Fulcrum Therapeutics stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Fulcrum Therapeutics. To that end, you should learn about the 3 warning signs we've spotted with Fulcrum Therapeutics (including 2 which make us uncomfortable).
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 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.
