Looking at Karuna Therapeutics, Inc.'s (NASDAQ:KRTX ) insider transactions over the last year, we can see that insiders were net buyers. That is, there were more number of shares purchased by insiders than there were sold.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Karuna Therapeutics
Karuna Therapeutics Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by CEO, President & Chairman Steven Paul for US$250k worth of shares, at about US$106 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$128. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Karuna Therapeutics is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Karuna Therapeutics insiders own about US$28m worth of shares. That equates to 0.7% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Karuna Therapeutics Insiders?
The fact that there have been no Karuna Therapeutics insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Karuna Therapeutics and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Karuna Therapeutics. Every company has risks, and we've spotted 1 warning sign for Karuna Therapeutics you should know about.
But note: Karuna Therapeutics 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.