Over the past year, many Xenon Pharmaceuticals Inc. (NASDAQ:XENE) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
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 Xenon Pharmaceuticals
Over the last year, we can see that the biggest insider sale was by the Chairman of the Board, Simon Pimstone, for US$1.9m worth of shares, at about US$39.90 per share. That means that an insider was selling shares at below the current price (US$40.54). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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. We note that the biggest single sale was 89% of Simon Pimstone's holding.
All up, insiders sold more shares in Xenon Pharmaceuticals than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
NasdaqGM:XENE Insider Trading Volume May 13th 2024
I will like Xenon Pharmaceuticals better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Xenon Pharmaceuticals Insiders Are Selling The Stock
Over the last three months, we've seen notably more insider selling, than insider buying, at Xenon Pharmaceuticals. In total, Independent Director Steven Gannon sold US$1.3m worth of shares in that time. Meanwhile Executive Vice President of Strategy & Innovation Robin Sherrington bought US$12k worth , as we said above . We don't view these transactions as a positive sign.
Does Xenon Pharmaceuticals Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Xenon Pharmaceuticals insiders own 0.3% of the company, worth about US$8.3m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Do The Xenon Pharmaceuticals Insider Transactions Indicate?
The stark truth for Xenon Pharmaceuticals is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. So we'd only buy after very careful consideration. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 4 warning signs for Xenon Pharmaceuticals (1 is concerning) you should be aware of.
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.
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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.
