Insiders were net sellers of Tarsus Pharmaceuticals, Inc.'s (NASDAQ:TARS ) stock during the past year. That is, insiders sold more stock than they bought.
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 Tarsus Pharmaceuticals
The Independent Director, William Link, made the biggest insider sale in the last 12 months. That single transaction was for US$913k worth of shares at a price of US$26.53 each. That means that an insider was selling shares at slightly below the current price (US$52.50). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 16% of William Link's stake. William Link was the only individual insider to sell 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
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. We usually like to see fairly high levels of insider ownership. Tarsus Pharmaceuticals insiders own 8.6% of the company, currently worth about US$173m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Tarsus Pharmaceuticals Insiders?
It doesn't really mean much that no insider has traded Tarsus Pharmaceuticals shares in the last quarter. While we feel good about high insider ownership of Tarsus Pharmaceuticals, we can't say the same about the selling of shares. 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. While conducting our analysis, we found that Tarsus Pharmaceuticals has 1 warning sign and it would be unwise to ignore it.
Of course Tarsus Pharmaceuticals 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.
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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.
