Possible Signal As Clinuvel Pharmaceuticals Insiders Sell AU$1.7m In Stock

Despite a 9.9% gain in Clinuvel Pharmaceuticals Limited's (ASX:CUV) stock price this week, shareholders shouldn't let up. Even though stock prices were relatively low, insiders elected to sell AU$1.7m worth of stock in the last year, which could indicate some expected downturn.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Clinuvel Pharmaceuticals

The Last 12 Months Of Insider Transactions At Clinuvel Pharmaceuticals

Over the last year, we can see that the biggest insider sale was by the CEO, MD & Director, Philippe Wolgen, for AU$1.1m worth of shares, at about AU$20.36 per share. That means that even when the share price was below the current price of AU$23.70, an insider wanted to cash in some shares. 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. 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. We note that the biggest single sale was only 1.8% of Philippe Wolgen's holding. Notably Philippe Wolgen was also the biggest buyer, having purchased AU$47k worth of shares.

Happily, we note that in the last year insiders paid AU$47k for 2.79k shares. But they sold 93.00k shares for AU$1.7m. In total, Clinuvel Pharmaceuticals insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Clinuvel 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.

Are Clinuvel Pharmaceuticals Insiders Buying Or Selling?

There was only a small bit of insider buying, worth AU$5.8k, in the last three months. Looking at the net result, we don't think these recent trades shed much light on how insiders, as a group, are feeling about the company's prospects.

Insider Ownership

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. It's great to see that Clinuvel Pharmaceuticals insiders own 13% of the company, worth about AU$158m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Clinuvel Pharmaceuticals Insider Transactions Indicate?

Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Clinuvel Pharmaceuticals insider transactions don't fill us with confidence. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Clinuvel Pharmaceuticals. Every company has risks, and we've spotted 1 warning sign for Clinuvel Pharmaceuticals you should know about.

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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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.