Anyone interested in Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) should probably be aware that the CEO & Director, Thomas McCourt, recently divested US$436k worth of shares in the company, at an average price of US$6.45 each. The eyebrow raising move amounted to a reduction of 12% in their holding.
The Last 12 Months Of Insider Transactions At Ironwood Pharmaceuticals
Notably, that recent sale by CEO & Director Thomas McCourt was not the only time they sold Ironwood Pharmaceuticals shares this year. They previously made an even bigger sale of -US$2.7m worth of shares at a price of US$15.24 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place 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$6.49. So it is hard to draw any strong conclusion from it.
In the last twelve months insiders purchased 53.68k shares for US$461k. But they sold 417.10k shares for US$5.2m. All up, insiders sold more shares in Ironwood Pharmaceuticals than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Ironwood Pharmaceuticals better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insider Ownership Of Ironwood Pharmaceuticals
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Ironwood Pharmaceuticals insiders own about US$16m worth of shares. That equates to 1.6% of the company. 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 Do The Ironwood Pharmaceuticals Insider Transactions Indicate?
The insider sales have outweighed the insider buying, at Ironwood Pharmaceuticals, 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! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for Ironwood Pharmaceuticals (of which 1 is potentially serious!) you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.