Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 46% resulting in a US$48m addition to the company’s market value. As a result, their original purchase of US$256.1k worth of stock is now worth US$321.3k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Enanta Pharmaceuticals

The Last 12 Months Of Insider Transactions At Enanta Pharmaceuticals

Notably, that recent purchase by Jay Luly is the biggest insider purchase of Enanta Pharmaceuticals shares that we've seen in the last year. We do like to see buying, but this purchase was made at well below the current price of US$7.14. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Enanta Pharmaceuticals Insiders Bought Stock Recently

There has been significantly more insider buying, than selling, at Enanta Pharmaceuticals, over the last three months. In total, President Jay Luly bought US$256k worth of shares in that time. On the other hand, insiders netted US$127k by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

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. It appears that Enanta Pharmaceuticals insiders own 6.3% of the company, worth about US$10m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Enanta Pharmaceuticals Tell Us?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Enanta Pharmaceuticals shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 3 warning signs for Enanta Pharmaceuticals you should be aware of, and 1 of them is significant.

But note: Enanta Pharmaceuticals may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.

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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.