Anyone interested in Ardelyx, Inc. (NASDAQ:ARDX) should probably be aware that a company insider, Forest Baskett, recently divested US$146k worth of shares in the company, at an average price of US$6.37 each. Equally important, that sale actually reduced their holding by a full 100% which hardly makes us feel bullish about the stock.
Ardelyx Insider Transactions Over The Last Year
In fact, the recent sale by Forest Baskett was the biggest sale of Ardelyx shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at slightly below the current price (US$6.59). 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. 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. We note that the biggest single sale was 100% of Forest Baskett’s holding.
In total, Ardelyx insiders sold more than they bought over the last year. You can see the insider transactions (by 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Ardelyx
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that Ardelyx insiders own about US$6.4m worth of shares (which is 1.1% of the company). Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
So What Does This Data Suggest About Ardelyx Insiders?
An insider sold stock recently, but they haven’t been buying. Zooming out, the longer term picture doesn’t give us much comfort. When you combine this with the relatively low insider ownership, we are very cautious about the stock. As the saying goes, only fools rush in. 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. While conducting our analysis, we found that Ardelyx has 2 warning signs and it would be unwise to ignore them.
But note: Ardelyx may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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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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. 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. Thank you for reading.