Quite a few insiders invested in Lumos Pharma, Inc. (NASDAQ:LUMO) last year which is positive news for shareholders
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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Lumos Pharma, Inc. (NASDAQ:LUMO), it sends a favourable message to the company's shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Lumos Pharma
Lumos Pharma Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director Joseph S. McCracken bought US$56k worth of shares at a price of US$7.55 per share. That means that an insider was happy to buy shares at around the current price of US$7.86. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Lumos Pharma share holders is that insiders were buying at near the current price.
While Lumos Pharma insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
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 Lumos Pharma
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 15% of Lumos Pharma shares, worth about US$9.8m, according to our data. However, it's possible that insiders might have an indirect interest through a more complex structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Do The Lumos Pharma Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Lumos Pharma stock. 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. Case in point: We've spotted 3 warning signs for Lumos Pharma you should be aware of, and 1 of them is potentially serious.