Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 10%, resulting in a US$24m rise in the company’s market capitalisation. Put another way, the original US$688k acquisition is now worth US$1.5m.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Rigel Pharmaceuticals
Over the last year, we can see that the biggest insider purchase was by President Raul Rodriguez for US$688k worth of shares, at about US$0.69 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$1.51. Because it occurred at a lower valuation, it doesn’t tell us much about whether insiders might find today’s price attractive.
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).
Insider Ownership Of Rigel Pharmaceuticals
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests Rigel Pharmaceuticals insiders own 1.0% of the company, worth about US$2.5m. We consider this fairly low insider ownership.
So What Do The Rigel Pharmaceuticals Insider Transactions Indicate?
The fact that there have been no Rigel Pharmaceuticals insider transactions recently certainly doesn’t bother us. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we’d be more comfortable if they owned more Rigel Pharmaceuticals stock. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. To that end, you should learn about the 4 warning signs we’ve spotted with Rigel Pharmaceuticals (including 3 which don’t sit too well with us).
But note: Rigel Pharmaceuticals 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, 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.
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