Insiders Sold US$1.6m Of Arrowhead Pharmaceuticals Stock Possibly Sending Warning Sign

Even though Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) stock gained 13% last week, insiders who sold US$1.6m worth of stock over the past year are probably better off. Selling at an average price of US$34.26, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Arrowhead Pharmaceuticals

Arrowhead Pharmaceuticals Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Chief Financial Officer, Kenneth Myszkowski, sold US$1.4m worth of shares at a price of US$35.19 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$21.05. So it may not shed much light on insider confidence at current levels.

All up, insiders sold more shares in Arrowhead Pharmaceuticals 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Arrowhead Pharmaceuticals better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Arrowhead Pharmaceuticals Boast High Insider Ownership?

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Arrowhead Pharmaceuticals insiders own about US$91m worth of shares. That equates to 3.9% of the company. 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 Do The Arrowhead Pharmaceuticals Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of Arrowhead Pharmaceuticals insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. 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. Every company has risks, and we've spotted 3 warning signs for Arrowhead Pharmaceuticals (of which 1 is a bit concerning!) you should know about.

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.