Insiders Enjoy US$723k Return After Buying Atea Pharmaceuticals Stock

Insiders who bought Atea Pharmaceuticals, Inc. (NASDAQ:AVIR) stock lover the last 12 months are probably not as affected by last week’s 10.0% loss. After taking the recent loss into consideration, the US$5.40m worth of stock they bought is now worth US$6.12m, indicating that their investment yielded a positive return.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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Atea Pharmaceuticals Insider Transactions Over The Last Year

The insider Bradley Radoff made the biggest insider purchase in the last 12 months. That single transaction was for US$5.3m worth of shares at a price of US$3.55 each. That means that an insider was happy to buy shares at above the current price of US$2.97. 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.

Happily, we note that in the last year insiders paid US$5.4m for 2.06m shares. On the other hand they divested 359.61k shares, for US$1.0m. In the last twelve months there was more buying than selling by Atea Pharmaceuticals insiders. They paid about US$2.62 on average. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today’s share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for Atea Pharmaceuticals

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.

Insider Ownership Of Atea Pharmaceuticals

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 15% of Atea Pharmaceuticals shares, worth about US$34m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Atea Pharmaceuticals Insider Transactions Indicate?

The fact that there have been no Atea Pharmaceuticals insider transactions recently certainly doesn’t bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Atea Pharmaceuticals 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 Atea Pharmaceuticals. For instance, we’ve identified 3 warning signs for Atea Pharmaceuticals (2 make us uncomfortable) you should be aware of.

Of course Atea Pharmaceuticals 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.