Alnylam Pharmaceuticals Insiders Sell US$5.0m Of Stock, Possibly Signalling Caution

The fact that multiple Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Alnylam Pharmaceuticals

The Last 12 Months Of Insider Transactions At Alnylam Pharmaceuticals

Over the last year, we can see that the biggest insider sale was by the CEO & Director, Yvonne Greenstreet, for US$1.9m worth of shares, at about US$235 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$271. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 13% of Yvonne Greenstreet's holding.

Insiders in Alnylam Pharmaceuticals didn't buy any shares in 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Does Alnylam Pharmaceuticals Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Alnylam Pharmaceuticals insiders own 0.4% of the company, currently worth about US$125m 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 Alnylam Pharmaceuticals Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Alnylam Pharmaceuticals shares in the last quarter. While we feel good about high insider ownership of Alnylam Pharmaceuticals, we can't say the same about the selling of shares. 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. Our analysis shows 2 warning signs for Alnylam Pharmaceuticals (1 makes us a bit uncomfortable!) and we strongly recommend you look at them before investing.

Of course Alnylam Pharmaceuticals may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.