Even though Foghorn Therapeutics Inc. (NASDAQ:FHTX) has fallen by 31% over the past week , insiders who sold US$72k worth of stock over the past year have had less luck. The average selling price of US$6.56 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At Foghorn Therapeutics
The Chief Strategy & Business Operations Officer, Fanny Cavalie, made the biggest insider sale in the last 12 months. That single transaction was for US$72k worth of shares at a price of US$6.56 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$5.53). So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was Fanny Cavalie.
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!
NasdaqGM:FHTX Insider Trading Volume April 19th 2024
I will like Foghorn Therapeutics better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Foghorn Therapeutics Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Foghorn Therapeutics shares. Specifically, Chief Strategy & Business Operations Officer Fanny Cavalie ditched US$72k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership Of Foghorn Therapeutics
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. It appears that Foghorn Therapeutics insiders own 11% of the company, worth about US$25m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Foghorn Therapeutics Tell Us?
An insider sold Foghorn Therapeutics shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Foghorn Therapeutics. Case in point: We've spotted 4 warning signs for Foghorn Therapeutics you should be aware of, and 2 of them are a bit concerning.
Of course Foghorn Therapeutics 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.