Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Savara Inc. (NASDAQ:SVRA), that sends out a positive message to the company's shareholders.

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.

Check out our latest analysis for Savara

Savara Insider Transactions Over The Last Year

The Independent Director David Ramsay made the biggest insider purchase in the last 12 months. That single transaction was for US$288k worth of shares at a price of US$2.88 each. That means that even when the share price was higher than US$2.77 (the recent price), an insider wanted to purchase shares. 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. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months insiders purchased 120.00k shares for US$347k. On the other hand they divested 87.70k shares, for US$291k. Overall, Savara insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Savara 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 Savara Have Bought Stock Recently

There has been significantly more insider buying, than selling, at Savara, over the last three months. In fact, two insiders bought US$347k worth of shares. On the other hand, insiders netted US$291k by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership Of Savara

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Savara insiders own about US$10m worth of shares. That equates to 1.7% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Savara Insiders?

It is good to see recent purchasing. 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. Given that insiders also own a fair bit of Savara we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Savara. Case in point: We've spotted 3 warning signs for Savara you should be aware of, and 1 of these doesn't sit too well with us.

Of course Savara may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

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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.