Insmed Incorporated (NASDAQ:INSM) shareholders might have a reason to worry after multiple insiders sold their shares over the last year.   Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations.  However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.    

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.

Insmed Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Director Melvin Sharoky for US$386k worth of shares, at about US$19.29 per share.   Even though the purchase was made at a significantly lower price than the recent price (US$26.08), we still think insider buying is a positive.  While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.  

All up, insiders sold more shares in Insmed 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.  If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NasdaqGS:INSM Insider Trading Volume May 8th 2024

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Insmed

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own.  Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term.   Insiders own 0.9% of Insmed shares, worth about US$36m.  We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.  

So What Does This Data Suggest About Insmed Insiders?

It doesn't really mean much that no insider has traded Insmed shares in the last quarter.      Our analysis of Insmed insider transactions leaves us cautious.   But it's good to see that insiders own shares in the company.      While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision.     Every company has risks, and we've spotted 3 warning signs for Insmed (of which 1 is a bit unpleasant!) you should know about.  

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

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.