Don't Ignore The Insider Selling In Catalyst Pharmaceuticals

We wouldn't blame Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) shareholders if they were a little worried about the fact that Steven Miller, the Executive VP recently netted about US$3.1m selling shares at an average price of US$20.35. That sale reduced their total holding by 18% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for Catalyst Pharmaceuticals

The Last 12 Months Of Insider Transactions At Catalyst Pharmaceuticals

In fact, the recent sale by Steven Miller was the biggest sale of Catalyst Pharmaceuticals shares made by an insider individual in the last twelve months, according to our records. So what is clear is that an insider saw fit to sell at around the current price of US$20.32. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

In the last year Catalyst Pharmaceuticals insiders didn't buy any company stock. 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!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Catalyst Pharmaceuticals

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Catalyst Pharmaceuticals insiders own 6.1% of the company, worth about US$150m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Catalyst Pharmaceuticals Tell Us?

Insiders sold Catalyst Pharmaceuticals shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. 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 found 3 warning signs for Catalyst Pharmaceuticals that deserve your attention before buying any shares.

But note: Catalyst Pharmaceuticals 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.