Top insider transactions of the week

Last Updated: 30. Januar 2024By

Today I will report to you again on notable stock transactions by executives or renowned hedge funds. After all, who should be able to judge the future development of companies better than the executives or major shareholders who are at the pulse of the times?

Stock transactions by these individuals can provide you with important information. Stock purchases in particular have a special informational value. The reason for this is simple: while there are many reasons for sales (e.g. a manager may also need liquidity for private obligations), massive stock purchases are likely driven by one thing: the intention to make money.

Attached you will find three companies that stood out in the past week due to interesting insider transactions:

Viridian Therapeutics – At the biotechnology company, there was a noticeable stock purchase by a company insider. The major shareholder Fairmont Funds Management took advantage of a capital increase and acquired 476,190 shares. At a purchase price of $21 per share, the insider had to lay out around $10 million for the purchases. With the transaction, Fairmont increased its shareholding by 34% to 1.839 million shares. This represents 3.4% of all outstanding shares.

Viridian Therapeutics is a clinical-stage biopharmaceutical company that focuses on the development of proprietary RNA-targeted therapeutics. Its product candidates include Cobomarsen for the treatment of patients with certain types of cancer, as well as Remlarsen and MRG-229, which are being developed for the treatment of patients with pathological fibrosis (Note: Fibrosis causes hardening of the affected organ or tissue and typically impairs its function). The company has so far generated almost no revenue (Q3 2023: $0.07 million) and is operating at a loss (Q3 2023: -$47 million). Its market value is currently just over $1 billion.

Compass Diversified Holdings – At Compass Diversified, seven different insiders have acquired stock packages since mid-January. In total, the company insiders purchased 127,124 shares. With purchase prices ranging from $21.40 to $22.95, the total transaction volume exceeded $2.78 billion.

Compass is similar to a publicly traded private equity fund with a portfolio of 10 niche companies in a variety of consumer and industrial markets. Subsidiaries include 5.11 Tactical, Sterno, Primaloft, Ergobaby, and Velocity Outdoor.

With a market value of $1.6 billion, Compass acquires, holds, and sells companies, using the parent company’s balance sheet and lower cost of capital to invest in their growth while also paying a quarterly dividend from the cash flow of its subsidiaries. The last dividend was $1 on an annualized basis, which corresponds to a dividend yield of around 4.3%.

Edgewise Therapeutics – The biotechnology company carried out a capital increase in mid-January, in which two company insiders participated with high sums. At $11, Orbimed Advisors and Peter Thompson acquired 909,090 shares. Accordingly, the value of the purchases was around $10 million. The complete capital increase (Note: a total of 21.8 million shares were issued) brought in gross proceeds of $240 million for the company. Subsequently, the stock shot up by 35%.

Edgewise Therapeutics is a clinical-stage biopharmaceutical company focused on the discovery, development, and commercialization of innovative treatments for severe, rare muscle diseases with significant unmet medical needs.

The company also has no revenues yet, but investors seem to be convinced of its prospects. Since the beginning of the year, the stock has risen by over 50%, resulting in a market value of $1.4 billion for the company.