Insiders who purchased US$397.5k worth of Alpha Cognition Inc. (NASDAQ:ACOG) shares over the past year recouped some of their losses after price gained 12% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$88k since the time of purchase.

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.

Alpha Cognition Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Chairman Len Mertz for US$250k worth of shares, at about US$9.00 per share. That means that even when the share price was higher than US$6.68 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. 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.

Happily, we note that in the last year insiders paid US$397k for 46.28k shares. On the other hand they divested 27.78k shares, for US$250k. In the last twelve months there was more buying than selling by Alpha Cognition insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Alpha Cognition Insiders Bought Stock Recently

We saw some Alpha Cognition insider buying shares in the last three months. Chief Operating Officer Lauren D’Angelo shelled out US$20k for shares in that time. It's great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

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. Insiders own 10% of Alpha Cognition shares, worth about US$14m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Alpha Cognition Insider Transactions Indicate?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Alpha Cognition and their transactions don't cause us concern. 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. For example - Alpha Cognition has 1 warning sign we think you should be aware of.

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.

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.