Should You Take Comfort From Insider Transactions At Fusion Pharmaceuticals Inc. (NASDAQ:FUSN)?

It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Fusion Pharmaceuticals Inc. (NASDAQ:FUSN).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

See our latest analysis for Fusion Pharmaceuticals

Fusion Pharmaceuticals Insider Transactions Over The Last Year

The Independent Director Heather Preston made the biggest insider purchase in the last 12 months. That single transaction was for US$150k worth of shares at a price of US$17.00 each. That means that an insider was happy to buy shares at above the current price of US$12.20. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Fusion Pharmaceuticals insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Fusion Pharmaceuticals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at Fusion Pharmaceuticals Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Fusion Pharmaceuticals. In total, insiders bought US$266k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

Insider Ownership of Fusion Pharmaceuticals

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 1.3% of Fusion Pharmaceuticals shares, worth about US$6.7m, according to our data. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Fusion Pharmaceuticals Insider Transactions Indicate?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Fusion Pharmaceuticals stock. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Be aware that Fusion Pharmaceuticals is showing 3 warning signs in our investment analysis, and 1 of those can't be ignored...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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, but not derivative transactions.

This article by Simply Wall St is general in nature. 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.

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