It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Exelixis, Inc. (NASDAQ:EXEL).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
Exelixis Insider Transactions Over The Last Year
The Independent Director, Charles Cohen, made the biggest insider sale in the last 12 months. That single transaction was for US$5.5m worth of shares at a price of US$22.41 each. That means that an insider was selling shares at around the current price of US$19.79. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it’s not too bad (but it’s still not a positive).
In the last twelve months insiders netted US$8.6m for 410k shares sold. In the last year Exelixis insiders didn’t buy any company stock. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Exelixis Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Exelixis shares. In total, Independent Director Lance Willsey sold US$1.0m worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership of Exelixis
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 1.3% of Exelixis shares, worth about US$78m. 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 Exelixis Tell Us?
An insider sold Exelixis shares recently, but they didn’t buy any. And there weren’t any purchases to give us comfort, over the last year. On the plus side, Exelixis makes money, and is growing profits. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’d think twice before buying! If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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, but not derivative transactions.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.