Insiders who bought US$1.24m worth of Gossamer Bio, Inc. (NASDAQ:GOSS) stock in the last year recovered part of their losses as the stock rose by 47% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$265k.
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.
View our latest analysis for Gossamer Bio
The Last 12 Months Of Insider Transactions At Gossamer Bio
The Co-Founder Faheem Hasnain made the biggest insider purchase in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$1.20 each. That means that an insider was happy to buy shares at above the current price of US$0.81. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months insiders purchased 1.20m shares for US$1.2m. But they sold 22.97k shares for US$26k. In total, Gossamer Bio insiders bought more than they sold over the last year. They paid about US$1.03 on average. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Gossamer Bio is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Gossamer Bio Insiders Bought Stock Recently
It's good to see that Gossamer Bio insiders have made notable investments in the company's shares. COO & CFO Bryan Giraudo spent US$113k on stock, and there wasn't any selling. This makes one think the business has some good points.
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. From looking at our data, insiders own US$4.0m worth of Gossamer Bio stock, about 2.9% of the company. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Gossamer Bio Tell Us?
The recent insider purchase is heartening. And the longer term insider transactions also give 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 Gossamer Bio insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Gossamer Bio. Case in point: We've spotted 4 warning signs for Gossamer Bio you should be aware of, and 2 of these make us uncomfortable.
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.