Quite a few PTC Therapeutics, Inc. (NASDAQ:PTCT) insiders sold their shares over the past year, which may be a cause for concern. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At PTC Therapeutics
The CEO & Director, Matthew Klein, made the biggest insider sale in the last 12 months. That single transaction was for US$274k worth of shares at a price of US$27.15 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$24.15). So it is hard to draw any strong conclusion from it.
All up, insiders sold more shares in PTC Therapeutics than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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Insiders At PTC Therapeutics Have Sold Stock Recently
We've seen more insider selling than insider buying at PTC Therapeutics recently. In total, insiders sold US$981k worth of shares in that time. On the other hand we note Chief Financial Officer Pierre Gravier bought US$199k worth of shares , as previously mentioned . Generally this level of net selling might be considered a bit bearish.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. PTC Therapeutics insiders own about US$45m worth of shares. That equates to 2.5% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About PTC Therapeutics Insiders?
The insider sales have outweighed the insider buying, at PTC Therapeutics, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing PTC Therapeutics. Be aware that PTC Therapeutics is showing 5 warning signs in our investment analysis, and 2 of those can't be ignored...
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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.