While it's been a great week for Wave Life Sciences Ltd. (NASDAQ:WVE) shareholders after stock gained 21%, not so much for insiders who sold stock over the past year. They could have sold their shares at much higher prices and gotten a better return on their investment if they had waited.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Wave Life Sciences

Wave Life Sciences Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the President, Paul B. Bolno, for US$77k worth of shares, at about US$2.32 per share. That means that even when the share price was below the current price of US$3.91, an insider wanted to cash in some shares. 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 11% of Paul B. Bolno's stake.

In the last year Wave Life Sciences 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!

I will like Wave Life Sciences better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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. From looking at our data, insiders own US$3.5m worth of Wave Life Sciences stock, about 1.0% of the company. I generally like to see higher levels of ownership.

So What Does This Data Suggest About Wave Life Sciences Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. The insider transactions at Wave Life Sciences are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. 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 Wave Life Sciences (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, but not derivative transactions.

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.