Don't Ignore The Insider Selling In Ardelyx

We'd be surprised if Ardelyx, Inc. (NASDAQ:ARDX) shareholders haven't noticed that the President, Michael Raab, recently sold US$271k worth of stock at US$5.93 per share. On the bright side, that sale was only 2.9% of their holding, so we doubt it's very meaningful, on its own.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Ardelyx Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Chairman of the Board David Mott for US$1.6m worth of shares, at about US$4.22 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$6.19. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

David Mott bought a total of 1.59m shares over the year at an average price of US$4.27. 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!

Check out our latest analysis for Ardelyx

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Ardelyx

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Ardelyx insiders own 3.5% of the company, worth about US$52m. 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 Ardelyx Insider Transactions Indicate?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Ardelyx insiders are well aligned, and that they may think the share price is too low. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

But note: Ardelyx may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 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.