In the last year, multiple insiders have substantially increased their holdings of Greenwich LifeSciences, Inc. (NASDAQ:GLSI) stock, indicating that insiders' optimism about the company's prospects has increased.

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.

View our latest analysis for Greenwich LifeSciences

The Last 12 Months Of Insider Transactions At Greenwich LifeSciences

The CEO, CFO & Director Snehal Patel made the biggest insider purchase in the last 12 months. That single transaction was for US$2.5m worth of shares at a price of US$14.30 each. That means that an insider was happy to buy shares at above the current price of US$12.71. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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.

In the last twelve months Greenwich LifeSciences insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

Greenwich LifeSciences is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders At Greenwich LifeSciences Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Greenwich LifeSciences. Overall, two insiders shelled out US$214k for shares in the company -- and none sold. This makes one think the business has some good points.

Does Greenwich LifeSciences 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Greenwich LifeSciences insiders own about US$88m worth of shares (which is 55% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Greenwich LifeSciences Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. 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. When combined with notable insider ownership, these factors suggest Greenwich LifeSciences insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! 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. Every company has risks, and we've spotted 3 warning signs for Greenwich LifeSciences (of which 2 don't sit too well with us!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.