Insiders Re-Evaluate Their US$654.9k Stock Purchase As LENZ Therapeutics Falls To US$113m
Insiders who acquired US$654.9k worth of LENZ Therapeutics, Inc.'s (NASDAQ:LENZ) stock at an average price of US$12.15 in the past 12 months may be dismayed by the recent 10% price decline. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$183.2k which is not ideal.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At LENZ Therapeutics
Over the last year, we can see that the biggest insider purchase was by President Evert Schimmelpennink for US$251k worth of shares, at about US$8.95 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$3.40). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
LENZ Therapeutics insiders may have bought shares in the last year, but they didn't sell any. They paid about US$12.15 on average. This is nice to see since it implies that insiders might see value around current prices. 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!
See our latest analysis for LENZ Therapeutics
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Does LENZ Therapeutics Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests LENZ Therapeutics insiders own 2.6% of the company, worth about US$3.0m. We prefer to see high levels of insider ownership.
So What Does This Data Suggest About LENZ Therapeutics Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. 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 LENZ Therapeutics stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing LENZ Therapeutics. For example - LENZ Therapeutics has 2 warning signs we think you should be aware of.
Of course LENZ Therapeutics may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 of direct interests only, but not derivative transactions or indirect interests.
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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.