The recent 22% drop in Mineralys Therapeutics, Inc.'s (NASDAQ:MLYS) stock could come as a blow to insiders who purchased US$180.2k worth of stock at an average buy price of US$14.13 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$82.2k which is not ideal.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Mineralys Therapeutics
The Last 12 Months Of Insider Transactions At Mineralys Therapeutics
Over the last year, we can see that the biggest insider purchase was by CFO, Chief Business Officer & Secretary Adam Levy for US$100k worth of shares, at about US$16.00 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$6.45). 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. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Mineralys Therapeutics insiders may have bought shares in the last year, but they didn't sell any. Their average price was about US$14.13. This is nice to see since it implies that insiders might see value around current prices. 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Mineralys Therapeutics Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Mineralys Therapeutics. Specifically, CEO & Director Jon Congleton bought US$54k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
Does Mineralys Therapeutics Boast High 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. We usually like to see fairly high levels of insider ownership. Our data indicates that Mineralys Therapeutics insiders own about US$9.1m worth of shares (which is 3.4% of the company). We do generally prefer see higher levels of insider ownership.
So What Do The Mineralys Therapeutics Insider Transactions Indicate?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Mineralys Therapeutics insiders are reasonably well aligned, and optimistic for the future. While we like knowing 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. Case in point: We've spotted 4 warning signs for Mineralys Therapeutics you should be aware of, and 2 of these shouldn't be ignored.
But note: Mineralys Therapeutics 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.