Some Guardant Health, Inc. (NASDAQ:GH) shareholders may be a little concerned to see that the Independent Director, Samir Kaul, recently sold a whopping US$2.1m worth of stock at a price of US$82.38 per share. That sale reduced their total holding by 22% which is hardly insignificant, but far from the worst we’ve seen.
Guardant Health Insider Transactions Over The Last Year
In fact, the recent sale by Independent Director Samir Kaul was not their only sale of Guardant Health shares this year. They previously made an even bigger sale of -US$2.2m worth of shares at a price of US$79.05 per share. So what is clear is that an insider saw fit to sell at around the current price of US$78.14. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn’t a major concern, though it’s hardly a good sign.
Samir Kaul sold a total of 52423 shares over the year at an average price of US$80.64. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Guardant Health insiders own about US$709m worth of shares (which is 9.6% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Guardant Health Tell Us?
An insider hasn’t bought Guardant Health stock in the last three months, but there was some selling. And even if we look to the last year, we didn’t see any purchases. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company. 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. Case in point: We’ve spotted 2 warning signs for Guardant Health you should be aware of, and 1 of these can’t be ignored.
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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, but not derivative transactions.
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