Insiders in Sage Therapeutics, Inc. (NASDAQ:SAGE) are down 32% on their US$2.9m purchase despite recent gains

·3 min read

Insiders who bought US$2.9m worth of Sage Therapeutics, Inc. (NASDAQ:SAGE) stock in the last year recovered part of their losses as the stock rose by 5.9% last week. However, total losses seen by insiders are still US$912k but in since the time of purchase.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Sage Therapeutics

The Last 12 Months Of Insider Transactions At Sage Therapeutics

Over the last year, we can see that the biggest insider purchase was by President Barry Greene for US$1.0m worth of shares, at about US$43.15 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$32.53). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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.

Sage Therapeutics insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around US$47.71. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
insider-trading-volume

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).

Insiders at Sage Therapeutics Have Bought Stock Recently

Over the last quarter, Sage Therapeutics insiders have spent a meaningful amount on shares. Specifically, insider George Golumbeski bought US$252k 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 Sage Therapeutics

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Sage Therapeutics insiders own 2.1% of the company, worth about US$40m. 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 Sage Therapeutics Insider Transactions Indicate?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Sage Therapeutics insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Sage Therapeutics. Every company has risks, and we've spotted 2 warning signs for Sage Therapeutics you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting