Those following along with Summit Therapeutics Inc. (NASDAQ:SMMT) will no doubt be intrigued by the recent purchase of shares by Mahkam Zanganeh, Co-CEO, President & Director of the company, who spent a stonking US$1.5m on stock at an average price of US$14.60. While that only increased their holding size by 0.3%, it is still a big swing by our standards.

Summit Therapeutics Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Co-CEO & Executive Chairman Robert Duggan bought US$262m worth of shares at a price of US$18.74 per share. That means that an insider was happy to buy shares at above the current price of US$14.01. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for 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.

While Summit Therapeutics insiders bought shares during the last year, they didn't sell. 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!

Summit Therapeutics is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership Of Summit Therapeutics

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Summit Therapeutics insiders own 79% of the company, currently worth about US$8.0b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Summit Therapeutics Tell Us?

It is good to see recent purchasing. 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 Summit Therapeutics insiders are well aligned, and quite possibly think the share price is too low. Looks promising! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, Summit Therapeutics has 4 warning signs (and 2 which make us uncomfortable) we think you should know about.

But note: Summit Therapeutics may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.