While FibroGen, Inc. (NASDAQ:FGEN) shareholders have enjoyed a good week with stock up 35%, they need remain vigilant. The fact that insiders chose to dispose of US$3.0m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At FibroGen
In the last twelve months, the biggest single sale by an insider was when the insider, Enrique Conterno, sold US$1.2m worth of shares at a price of US$21.16 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$2.73. So it may not shed much light on insider confidence at current levels.
Insiders in FibroGen didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like FibroGen better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership
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. Our data suggests FibroGen insiders own 1.0% of the company, worth about US$2.6m. We consider this fairly low insider ownership.
What Might The Insider Transactions At FibroGen Tell Us?
It doesn't really mean much that no insider has traded FibroGen shares in the last quarter. We don't take much encouragement from the transactions by FibroGen insiders. And we're not picking up on high enough insider ownership to give us any comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 5 warning signs for FibroGen (3 make us uncomfortable!) and we strongly recommend you look at them before investing.
Of course FibroGen may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.