In the last year, many Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) insiders sold a substantial stake in the company which may have sparked shareholders' attention.   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, if numerous insiders are selling, shareholders should investigate more.    

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.

The Last 12 Months Of Insider Transactions At Crinetics Pharmaceuticals

In the last twelve months, the biggest single sale by an insider was when the Founder, R. Struthers, sold US$1.0m worth of shares at a price of US$20.81 per share.    That means that an insider was selling shares at  slightly  below the current price (US$43.49).  As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower 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.   This single sale was just 4.9% of R. Struthers's stake.    

Over the last year we saw more insider selling of Crinetics Pharmaceuticals shares, than buying.    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!

NasdaqGS:CRNX Insider Trading Volume April 17th 2024

I will like Crinetics 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.

Insiders At Crinetics Pharmaceuticals Have Sold Stock Recently  

Over the last three months, we've seen significant insider selling at Crinetics Pharmaceuticals.  In total,  insiders  sold US$138k worth of shares in that time, and we didn't record any purchases whatsoever.  This may suggest that some insiders think that the shares are not cheap.  

Insider Ownership Of Crinetics Pharmaceuticals

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.   Insiders own 1.6% of Crinetics Pharmaceuticals shares, worth about US$54m.  This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.  

So What Do The Crinetics Pharmaceuticals Insider Transactions Indicate?

Insiders  sold stock recently, but they haven't been buying.     Zooming out, the longer term picture doesn't give us much comfort.    Insider ownership isn't particularly high, so this analysis makes us cautious about the company.  We're in no rush to buy!      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 example - Crinetics Pharmaceuticals has 3 warning signs we think 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.