Olema Pharmaceuticals, Inc.'s (NASDAQ:OLMA) stock price has dropped 11% in the previous week, but insiders who sold US$1.6m in 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$14.40 is still below the current share price.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Olema Pharmaceuticals Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the President, Sean Bohen, sold US$824k worth of shares at a price of US$15.29 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$10.41). So it may not shed much light on insider confidence at current levels.

Olema Pharmaceuticals insiders didn't buy any shares 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!

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Does Olema Pharmaceuticals Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 5.2% of Olema Pharmaceuticals shares, worth about US$33m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Olema Pharmaceuticals Insider Transactions Indicate?

The fact that there have been no Olema Pharmaceuticals insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Olema Pharmaceuticals insiders. But we do like the fact that insiders own a fair chunk of the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Olema Pharmaceuticals. When we did our research, we found 4 warning signs for Olema Pharmaceuticals (1 doesn't sit too well with us!) that we believe deserve your full attention.

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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