Insiders At Crinetics Pharmaceuticals Sold US$2.4m In Stock, Alluding To Potential Weakness

Over the past year, many Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

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 Crinetics Pharmaceuticals

The Last 12 Months Of Insider Transactions At Crinetics Pharmaceuticals

In the last twelve months, the biggest single sale by an insider was when the Founder, R. Struthers, sold US$1.0m worth of shares at a price of US$20.81 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$45.81. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 4.9% of R. Struthers's holding.

All up, insiders sold more shares in Crinetics 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!

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Insiders At Crinetics Pharmaceuticals Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Crinetics Pharmaceuticals. In total, insiders dumped US$138k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership Of Crinetics 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. Crinetics Pharmaceuticals insiders own about US$59m worth of shares. That equates to 1.6% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Crinetics Pharmaceuticals Insider Transactions Indicate?

Insiders haven't bought Crinetics Pharmaceuticals stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for Crinetics Pharmaceuticals 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.