Heavy Insider Buying On Cassava Sciences Pushes Up The Stock Price

|
About: Cassava Sciences, Inc. (SAVA)
by: Edward Vranic, CFA
This article is exclusive for subscribers.
Edward Vranic, CFA
Long/short equity, Growth, momentum, event-driven
Summary

SAVA's CEO Remi Barbier purchased $600,000 worth of his company's stock during December.

Other insiders also purchased significant amounts, led by Board member Sanford Robertson who purchased over $1 million worth of shares.

Insider buying has taken place since data on PTI-125, a drug candidate for Alzheimer's disease, was presented at a conference in early December.

SAVA's short-term need for cash is low, but not non-existent. Financing is not likely imminent but can never be ruled out for any clinical stage biotech company. Especially one that just saw significant price appreciation.

The stock appears to be overbought on hype of the insiders buying, but there are no immediate red flags that indicate sell to me.

When investors with high risk tolerances are looking at speculative, early-stage biotech stocks that are pre-revenue and burning cash, they have to rely heavily on factors outside of the financial statements. One of those factors