Have Insiders Sold Arcutis Biotherapeutics Shares Recently?

We'd be surprised if Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) shareholders haven't noticed that the President, Todd Watanabe, recently sold US$245k worth of stock at US$12.70 per share. However, the silver lining is that the sale only reduced their total holding by 2.7%, so we're hesitant to read anything much into it, on its own.

See our latest analysis for Arcutis Biotherapeutics

The Last 12 Months Of Insider Transactions At Arcutis Biotherapeutics

Over the last year, we can see that the biggest insider sale was by the Executive VP & Chief Medical Officer, Patrick Burnett, for US$522k worth of shares, at about US$10.29 per share. That means that even when the share price was below the current price of US$12.42, an insider wanted to cash in some shares. 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. It is worth noting that this sale was only 28% of Patrick Burnett's holding.

In the last twelve months insiders purchased 12.79k shares for US$48k. On the other hand they divested 248.24k shares, for US$2.5m. Over the last year we saw more insider selling of Arcutis Biotherapeutics shares, than buying. The average sell price was around US$10.02. We don't gain confidence from insider selling below the recent share price. But we wouldn't put too much weight on the insider selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Does Arcutis Biotherapeutics 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. We usually like to see fairly high levels of insider ownership. Insiders own 1.9% of Arcutis Biotherapeutics shares, worth about US$29m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Arcutis Biotherapeutics Insiders?

The stark truth for Arcutis Biotherapeutics is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! 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. In terms of investment risks, we've identified 2 warning signs with Arcutis Biotherapeutics and understanding them should be part of your investment process.

Of course Arcutis Biotherapeutics 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.

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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.