For Applied Therapeutics Insiders, Selling US$8.5m Of Shares Was A Smart Move

Despite a 64% gain in Applied Therapeutics, Inc.'s (NASDAQ:APLT) stock price this week, shareholders shouldn't let up. The fact that insiders chose to dispose of US$8.5m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Applied Therapeutics

The Last 12 Months Of Insider Transactions At Applied Therapeutics

Over the last year, we can see that the biggest insider sale was by the Chair of the Board of Directors, Shoshana Shendelman, for US$4.7m worth of shares, at about US$6.18 per share. That means that an insider was selling shares at slightly below the current price (US$7.70). 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. 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 15% of Shoshana Shendelman's stake.

All up, insiders sold more shares in Applied Therapeutics than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insiders At Applied Therapeutics Have Sold Stock Recently

The last quarter saw substantial insider selling of Applied Therapeutics shares. Specifically, insiders ditched US$4.9m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Does Applied Therapeutics 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Applied Therapeutics insiders own 5.6% of the company, worth about US$49m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Applied Therapeutics Insider Transactions Indicate?

Insiders haven't bought Applied Therapeutics stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 5 warning signs we've spotted with Applied Therapeutics (including 3 which make us uncomfortable).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

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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.