Insiders At Catalyst Pharmaceuticals Sold US$4.4m In Stock, Alluding To Potential Weakness

Many Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Catalyst Pharmaceuticals

The Last 12 Months Of Insider Transactions At Catalyst Pharmaceuticals

The Executive VP, Steven Miller, made the biggest insider sale in the last 12 months. That single transaction was for US$3.1m worth of shares at a price of US$20.59 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$22.07. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. This single sale was just 18% of Steven Miller's stake.

Catalyst Pharmaceuticals insiders didn't buy any shares over the last year. 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!

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Insider Ownership Of Catalyst Pharmaceuticals

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Catalyst Pharmaceuticals insiders own 5.9% of the company, currently worth about US$156m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Catalyst Pharmaceuticals Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Catalyst Pharmaceuticals shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Catalyst Pharmaceuticals insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Catalyst Pharmaceuticals. Case in point: We've spotted 1 warning sign for Catalyst Pharmaceuticals you should be aware of.

Of course Catalyst Pharmaceuticals 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.