While Avidity Biosciences, Inc. (NASDAQ:RNA) shareholders have enjoyed a good week with stock up 12%, they need remain vigilant. Even though stock prices were relatively low, insiders elected to sell US$1.0m worth of stock in the last year, which could indicate some expected downturn.

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 Avidity Biosciences

The Distinguished Scientist, Arthur Levin, made the biggest insider sale in the last 12 months. That single transaction was for US$542k worth of shares at a price of US$27.11 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$46.72. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 7.3% of Arthur Levin's stake.

Avidity Biosciences 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!

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 Of Avidity Biosciences

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.4% of Avidity Biosciences shares, worth about US$23m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Avidity Biosciences Tell Us?

The fact that there have been no Avidity Biosciences insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Avidity Biosciences insiders. But we do like the fact that insiders own a fair chunk of the company. 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. Our analysis shows 2 warning signs for Avidity Biosciences (1 is concerning!) and we strongly recommend you look at them before investing.

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 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.