Last week, Exagen Inc. (NASDAQ:XGN) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 28% last week, resulting in a US$15m increase in the company's market worth, implying a 64% gain on their initial purchase. Put another way, the original US$212.3k acquisition is now worth US$347.1k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Exagen

The Last 12 Months Of Insider Transactions At Exagen

The CEO, President & Director John Aballi made the biggest insider purchase in the last 12 months. That single transaction was for US$78k worth of shares at a price of US$1.92 each. Even though the purchase was made at a significantly lower price than the recent price (US$3.99), we still think insider buying is a positive. 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.

Happily, we note that in the last year insiders paid US$212k for 87.00k shares. On the other hand they divested 19.52k shares, for US$38k. In the last twelve months there was more buying than selling by Exagen insiders. They paid about US$2.44 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. 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).

Exagen Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Exagen. In total, insiders bought US$135k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.

Does Exagen Boast High Insider Ownership?

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. From our data, it seems that Exagen insiders own 12% of the company, worth about US$8.2m. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Exagen Insiders?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Exagen insiders are reasonably well aligned, and optimistic for the future. 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. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of Exagen.

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.

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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.