Insiders of Delcath Systems Getting Good Value On Their US$736.5k Investment

Delcath Systems, Inc. (NASDAQ:DCTH) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 18%, resulting in a US$16m rise in the company’s market capitalisation, translating to a gain of 58% on their initial investment. As a result, the stock they originally bought for US$736.5k is now worth US$1.16m.

Although we don’t think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Delcath Systems

The Last 12 Months Of Insider Transactions At Delcath Systems

The Chief Medical Officer Vojislav Vukovic made the biggest insider purchase in the last 12 months. That single transaction was for US$149k worth of shares at a price of US$2.48 each. We do like to see buying, but this purchase was made at well below the current price of US$4.68. Because it occurred at a lower valuation, it doesn’t tell us much about whether insiders might find today’s price attractive.

While Delcath Systems insiders bought shares during the last year, they didn’t sell. They paid about US$2.96 on average. We don’t deny that it is nice to see insiders buying stock 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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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).

Does Delcath Systems Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Our data suggests Delcath Systems insiders own 3.2% of the company, worth about US$3.3m. We consider this fairly low insider ownership.

So What Do The Delcath Systems Insider Transactions Indicate?

The fact that there have been no Delcath Systems insider transactions recently certainly doesn’t bother us. 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 Delcath Systems 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. Our analysis shows 2 warning signs for Delcath Systems (1 is a bit unpleasant!) and we strongly recommend you look at these before investing.

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 of direct interests only, but not derivative transactions or indirect interests.

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.


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