Even though Fate Therapeutics, Inc. (NASDAQ:FATE) has fallen by 12% over the past week , insiders who sold US$222k worth of stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of US$4.27 is still below the current share price.
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 Fate Therapeutics
The Founder, J. Wolchko, made the biggest insider sale in the last 12 months. That single transaction was for US$63k worth of shares at a price of US$4.37 each. 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$3.41. So it may not tell us anything about how insiders feel about the current share price.
In the last year Fate Therapeutics insiders didn't buy any company stock. 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!
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Insider Ownership Of Fate 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. We usually like to see fairly high levels of insider ownership. Our data indicates that Fate Therapeutics insiders own about US$6.0m worth of shares (which is 1.5% of the company). Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At Fate Therapeutics Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. We don't take much encouragement from the transactions by Fate Therapeutics insiders. And we're not picking up on high enough insider ownership to give us any comfort. While it's good to be aware of 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 Fate Therapeutics (of which 1 is potentially serious!) you should know about.
But note: Fate Therapeutics may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com