Insiders who purchased US$103,000 of Atea Pharmaceuticals, Inc. (NASDAQ: AVIR) the stock last year recouped some of its losses, with the stock rising 11% in the past week. However, the purchase turns out to be a costly gamble as insiders have not yet anticipated their losses which currently stand at US$32,000 from the time of purchase.
While we don’t think shareholders should simply follow insider trades, we think it makes perfect sense to keep an eye on what insiders are doing.
Check opportunities and risks within the American pharmaceutical industry.
The last 12 months of insider trading at Atea Pharmaceuticals
Independent director Polly Murphy made the biggest insider buy in the past 12 months. This single transaction was for US$103,000 of shares at a price of US$8.57 each. This means that even when the stock price was above US$5.90 (the recent price), an insider wanted to buy stock. Their perspective may have changed since then, but it at least shows that they were feeling optimistic at the time. For us, it is very important to consider the price that insiders pay for the shares. Generally speaking, it catches our attention when an insider has bought stocks at prices higher than the current price, because it suggests that they thought the stock was worth buying, even at a higher price. Polly Murphy was the only individual insider to buy shares in the last twelve months.
You can see a visual representation of insider trading (by companies and individuals) over the past 12 months, below. If you want to know exactly who sold, how much and when, just click on the chart below!
There are many other companies whose insiders buy shares. You probably do not want to miss this free list of growing companies insiders are buying.
Does Atea Pharmaceuticals Claim High Insider Ownership?
For an ordinary shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely insiders will be incentivized to build the company for the long term. Insiders of Atea Pharmaceuticals own about $45 million in stock. This equates to 9.1% of the business. This level of insider ownership is good, but just short of being particularly noteworthy. This certainly suggests a reasonable degree of alignment.
So what does this data suggest about Atea Pharmaceuticals insiders?
There have been no insider trades in the last three months – that’s not saying much. On a more positive note, last year’s transactions are encouraging. Insiders have a stake in Atea Pharmaceuticals and their transactions are of no concern to us. So, while it is useful to know what insiders are doing in terms of buying or selling, it is also useful to know the risks that a particular company faces. For example, Atea Pharmaceuticals has 2 warning signs (and 1 which cannot be ignored) we think you should know.
But note: Atea Pharmaceuticals may not be the best stock to buy. So take a look at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.
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Find out if Atea Pharmaceuticals is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
