Investors who take an interest in Summit Therapeutics Inc. (NASDAQ:SMMT) should definitely note that the Co-CEO, President & Director, Mahkam Zanganeh, recently paid US$3.73 per share to buy US$411k worth of the stock. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

The Last 12 Months Of Insider Transactions At Summit Therapeutics

Over the last year, we can see that the biggest insider purchase was by COO & Director Manmeet Soni for US$5.0m worth of shares, at about US$1.68 per share. Even though the purchase was made at a significantly lower price than the recent price (US$4.14), we still think insider buying is a positive. 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.

In the last twelve months Summit Therapeutics insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Summit Therapeutics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Summit Therapeutics insiders own 82% of the company, currently worth about US$2.4b based on the recent share price. 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 Do The Summit Therapeutics Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Summit Therapeutics. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Summit Therapeutics. When we did our research, we found 4 warning signs for Summit Therapeutics (2 are a bit concerning!) that we believe deserve your full attention.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.