Don't Ignore The Insider Selling In Guardant Health

Some Guardant Health, Inc. (NASDAQ:GH) shareholders may be a little concerned to see that the Chief Legal Officer & Corporate Secretary, John Saia, recently sold a substantial US$866k worth of stock at a price of US$96.25 per share. That's a big disposal, and it decreased their holding size by 17%, which is notable but not too bad.

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Guardant Health Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Co-Founder, Helmy Eltoukhy, sold US$18m worth of shares at a price of US$59.93 per share. That means that an insider was selling shares at slightly below the current price (US$97.71). 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. This single sale was just 11% of Helmy Eltoukhy's stake.

Guardant Health insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and 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!

Check out our latest analysis for Guardant Health

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Does Guardant Health 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Guardant Health insiders own 3.9% of the company, currently worth about US$483m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Guardant Health Insider Transactions Indicate?

Insiders sold Guardant Health shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 3 warning signs for Guardant Health (1 makes us a bit uncomfortable!) 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.