Those following along with Edesa Biotech, Inc. (NASDAQ:EDSA) will no doubt be intrigued by the recent purchase of shares by Pardeep Nijhawan, CEO, Company Secretary & Director of the company, who spent a stonking US$800k on stock at an average price of US$5.21. Not only is that a big swing, but it increased their holding size by 28%, which is definitely great to see.

Edesa Biotech Insider Transactions Over The Last Year

In fact, the recent purchase by Pardeep Nijhawan was the biggest purchase of Edesa Biotech shares made by an insider individual in the last twelve months, according to our records. Even though the purchase was made at a significantly lower price than the recent price (US$7.35), 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$1.1m for 276.10k shares. On the other hand they divested 22.49k shares, for US$140k. Overall, Edesa Biotech insiders were net buyers during the last year. The average buy price was around US$4.00. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. 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!

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).

Insider Ownership Of Edesa Biotech

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that Edesa Biotech insiders own about US$6.0m worth of shares (which is 9.9% of the company). We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Edesa Biotech Insiders?

It's certainly positive to see the recent insider purchase. 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. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Edesa Biotech stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company.

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.