Thomas McHugh, CFO at Avadel Pharmaceuticals (AVDL), recently bought 2,000 shares. The buy increased his position by 3 percent, and came to a total cost of $29,000.
The CFO was the last insider buyer with a 2,000 share pickup last August. Other company insiders, including multiple directors and the CFO have been buyers. One director with a large stake has been a seller in the past year.
Overall, Avadel insiders own 4.3 percent of shares.
The biopharmaceutical company has jumped 120 percent higher in the past year amid a promising Phase 3 testing for a narcolepsy drug.
Plus, investors are warming up to smaller-cap stocks after mega-cap stocks led the market higher last year.
Avadel is still an early-stage company, and is losing money at a rapid pace right now. If the drug passes muster, however, shares should rally. And a larger pharmaceutical may make a bid to buy the company outright.
Action to take: Shares are in an uptrend, as they are with many smaller-cap and pharma stocks right now. That trend looks likely to continue. Momentum investors may like shares for further upside.
For traders, the June $15 calls are slightly in-the-money. Last going for about $2.80, they could see mid-to-high double-digit returns on a further rally higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.