In the world of searching for value amid a wide range of companies in different industries, finding undervalued companies in the fray can be an increasingly difficult exercise.
Beyond assessing a company’s underlying fundamentals and long-term growth prospects, taking a look at signals provided by insiders within said firm can be one of the tools used to assess which direction a company may be heading, based on the expert opinion of those running the business.
While buying and selling activity by insiders may in no way reflect which direction a company’s stock will move in the near to medium term, an indication of how management feels about the long-term prospects of an operating business is one way investors can reaffirm or challenge valuation assumptions in a very uncertain world.
At the end of October, two Aurinia Pharmaceuticals Inc. (TSX:AUP) insiders purchased shares in separate transactions, indicating bullishness on the pharmaceutical company’s long-term prospects. The company’s general manager for the Americas purchased 5,000 shares of the company alongside the company’s VP of Corporate and Public Affairs who purchased 1,750 shares.
These transactions follow a year to date increase in the value of Aurinia’s share price of more than 160%, indicating further upside may be likely for shareholders looking for growth in the pharmaceuticals space.
Aurinia is in the clinical development stage of a number of nephrology and autoimmunity drugs with a specific focus on developing a therapeutic drug to treat lupus nephritis.
Invest wisely, my friends.
