When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Design Therapeutics, Inc.’s (NASDAQ:DSGN) instance, it’s good news for shareholders.
Although we don’t think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Design Therapeutics Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Co-Founder & Executive Chairperson Pratik Shah bought US$500k worth of shares at a price of US$20.00 per share. That means that an insider was happy to buy shares at above the current price of US$17.78. 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Design Therapeutics insiders may have bought shares in the last year, but they didn’t sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Design Therapeutics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Design Therapeutics insiders own 16% of the company, currently worth about US$159m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Design Therapeutics Tell Us?
It doesn’t really mean much that no insider has traded Design Therapeutics shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Design Therapeutics insiders are reasonably well aligned (owning significant chunk of the company’s shares) and optimistic for the future. So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. For instance, we’ve identified 3 warning signs for Design Therapeutics (1 is potentially serious) you should be aware of.
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, but not derivative transactions.
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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.