We recently published a list of 10 Small–Cap Stocks Insiders Are Selling Recently. In this article, we are going to take a look at where Bicycle Therapeutics plc (NASDAQ:BCYC) stands against other small–cap stocks insiders are selling recently.
Why are some investors focusing on stocks with smaller market capitalizations? Among some of the reasons are diversification of their portfolios, because small-cap stocks usually operate in different industries than large-cap companies. Another reason is the share price, which is often lower than that of companies with larger market capitalization (above $10 billion), making them more affordable.
Some investors’ strategy is finding nascent companies with strong growth potential, which can bring high returns once the companies have grown. Even though small-cap stocks often carry higher risks and are more prone to market volatility, they also offer investors more room for growth.
What are some ways to assess small-cap stocks that are worth investing in? While there’s no single simple or complicated rule that investors can follow to achieve secure results, some strategies can help. One strategy is to keep track of insider trading activity. Insiders or, in other words, people in high positions within companies, such as CEOs, CFOs, directors and other executives have valuable insights into the company’s strategic moves, plans, and initiatives. A CEO’s investment in a company’s stock can sometimes signal strong confidence in the company’s future.
Does this mean that it is a bad sign for the company when insiders sell their shares? Not necessarily; just like insider buying activity doesn’t always mean stock is heading for growth. When insiders are selling their shares, it can sometimes mean that the management is losing confidence. On the other hand, it also happens that large shareholders just want to trim their holdings to more appropriate position sizes based on the risk/reward. Insiders can also decide to sell their shares due to personal financial reasons that have nothing to do with the company.
While both insider selling and buying can be driven by various motives, it’s important to consider these moves within the broader context of the company’s fundamentals, industry trends, and overall market conditions.
To identify the 10 large-cap stocks insiders are selling recently, we considered only stocks with a market capitalization of between $250 million to $2 billion. We first used Insider Monkey’s insider trading stock screener and looked for stocks with at least two insiders selling over the last two months.
With each stock we note the number of recent insider sales and the company’s current market capitalization. But why is it important to follow insider activity? Our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds, focusing on insider trading and stock picks from hedge fund investor newsletters and conferences. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Bicycle Therapeutics (BCYC): Among The Small–Cap Stocks Insiders Are Selling Recently
A medical researcher examining a toxon conjugate under a microscope in a laboratory setting.
In the middle of this list of 10 small-cap stocks insiders are selling recently is Bicycle Therapeutics plc (NASDAQ:BCYC), a clinical-stage biopharmaceutical company, focused on the development of a class of medicine for undeserved diseases in the US and the UK.
The company’s proprietary Bicycle platform technology develops novel peptide-based therapeutics for oncology treatment. The company’s goal is to become the leader in solid tumor medicine by the number of patients able to treat. Bicycle Therapeutics (NASDAQ:BCYC) develops a class of medicines called Bicycles, which arechemically synthesized peptides constrained to form two loops. These structures demonstrate high stability and affinity for targets, translating into therapies having favorable efficacy and safety profiles.
The company’s leading candidate zelenectide pevedotin (formerly BT8009), has been positioned as a potential alternative to existing treatments like Padcev for patients with metastatic urothelial carcinoma (mUC). While the company is primarily focused on oncology treatments, its Bicycle platform shows huge potential for expansion into other therapeutic areas.
In its latest update on the leading candidate, the company revealed that new data continue to position zelenectide pevedotin as a potentially promising best-in-class therapy for mUC.
In January, eight insiders, among which is the company’s CEO, sold a total of around $548,178 worth of shares, at an average price of $14.41. The stock is currently trading $12.49 having lost 10.79% since the beginning of the year. Over the last five years, its shares declined 16.34%.
As many as nine analysts have an average “Buy” rating on the stock, and the 12-month price target is $33.25. This represents an increase of 166.21% from the latest price, as per data from StockAnalysis.
Overall, BCYC ranks 5th on our list of small–cap stocks insiders are selling recently. While we acknowledge the potential of BCYC, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BCYC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
