Read This Before You Sell Edgewise Therapeutics, Inc. (NASDAQ: EWTX) Shares
We have lost count of the number of times insiders have racked up shares in a company that is improving significantly. Unfortunately, there are also many examples of stock prices plummeting after insiders sell stocks. Shareholders might therefore want to know if any insiders bought or sold shares of Edgewise Therapeutics, Inc. (NASDAQ: EWTX).
What is insider selling?
It is quite normal to see company insiders, such as board members, trading company shares from time to time. However, there are rules governing insider trading and certain information is required.
We don’t believe shareholders should just follow insider trading. But it makes perfect sense to keep an eye on what insiders are doing. For example, a Harvard University study found that “insider buying generates abnormal returns of over 6% per year.”
Edgewise Therapeutics Insider Trading in the Past Year
Over the past year, we can see that the biggest insider buy was made by independent director Jonathan Root for US $ 250,000 of shares, at around US $ 16.00 per share. We love to see purchases, but this purchase was made at a much lower price than the current price of US $ 23.95. While it suggests that insiders view the stock as undervalued at lower prices, this trade doesn’t tell us much about what they think about current prices.
Edgewise Therapeutics insiders may have bought shares in the past year, but they haven’t sold any. You can see insider trading (by companies and individuals) over the past year represented in the graph below. By clicking on the graph below, you can see the exact detail of each insider trade!
NasdaqGS: EWTX Insider Trading Volume June 27, 2021
Edgewise Therapeutics isn’t the only one to buy. So take a look at this free list of growing companies with insider buying.
Edgewise Therapeutics insiders bought shares recently
It’s good to see that Edgewise Therapeutics insiders have made some notable investments in the shares of the company. In total, insiders bought US $ 500,000 worth of shares during this period, and we did not record any sales. This shows some optimism about the future of the company.
Edgewise Therapeutics Insider Property
I like to look at how many shares insiders own in a company, to help inform my perspective on their alignment with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will have an incentive to build the business for the long term. Insiders own 1.3% of the shares of Edgewise Therapeutics, valued at approximately US $ 16 million. While this is a high but not exceptional level of insider ownership, it is enough to indicate some alignment between management and small shareholders.
So what do Edgewise Therapeutics’ insider trading indicate?
Recent insider buying is encouraging. And longer-term insider trading gives us confidence as well. But on the other hand, the company has made a loss over the past year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest that Edgewise Therapeutics insiders are well aligned and may think the stock price is too low. 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. Be aware that Edgewise Therapeutics shows 3 warning signs in our investment analysis, and 1 of them is potentially serious …
Of course Edgewise Therapeutics May Not Be The Best Stock To Buy. So you might want to see this free collection of high quality companies.
For the purposes of this article, insiders are the persons who report their transactions to the relevant regulatory body. We currently account for open market transactions and private assignments, but not derivative transactions.
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