Collegium Pharmaceutical Insiders Sell US$2.3m Of Stock, Possibly Signalling Caution

The fact that multiple Collegium Pharmaceutical, Inc. (NASDAQ:COLL) 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, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Collegium Pharmaceutical

The Last 12 Months Of Insider Transactions At Collegium Pharmaceutical

Over the last year, we can see that the biggest insider sale was by the Executive VP & Chief Commercial Officer, Scott Dreyer, for US$1.1m worth of shares, at about US$33.98 per share. That means that an insider was selling shares at around the current price of US$31.20. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

In the last year Collegium Pharmaceutical insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Collegium Pharmaceutical 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.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 1.5% of Collegium Pharmaceutical shares, worth about US$16m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Collegium Pharmaceutical Insiders?

It doesn't really mean much that no insider has traded Collegium Pharmaceutical shares in the last quarter. We don't take much encouragement from the transactions by Collegium Pharmaceutical insiders. But it's good to see that insiders own shares in the company. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we've found that Collegium Pharmaceutical has 2 warning signs (1 is potentially serious!) that deserve your attention before going any further with your analysis.

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.