Some Edgewise Therapeutics, Inc. (NASDAQ:EWTX) shareholders may be a little concerned to see that the Co-Founder, Alan Russell, recently sold a substantial US$1.6m worth of stock at a price of US$9.33 per share. Probably the most concerning element of the whole transaction is that the disposal amounted to 98% of their entire holding.
View our latest analysis for Edgewise Therapeutics
The Last 12 Months Of Insider Transactions At Edgewise Therapeutics
Notably, that recent sale by Alan Russell is the biggest insider sale of Edgewise Therapeutics shares that we've seen in the last year. That means that even when the share price was below the current price of US$10.94, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was 98% of Alan Russell's stake.
The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that Edgewise Therapeutics insiders own 1.0% of the company, worth about US$7.0m. Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About Edgewise Therapeutics Insiders?
The insider sales have outweighed the insider buying, at Edgewise Therapeutics, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. When you consider that most companies have higher levels of insider ownership, we're a little wary. So we'd only buy after very careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 5 warning signs (2 don't sit too well with us!) that you ought to be aware of before buying any shares in Edgewise Therapeutics.
But note: Edgewise 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.
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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.