Selling Editas Medicine Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Editas Medicine, Inc.'s (NASDAQ:EDIT) value has fallen 17% in the last week, but insiders who sold US$1.2m worth of stock over the last year have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of US$8.42 is still lower than the current share price.

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 Editas Medicine

Editas Medicine Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the President, Gilmore O’Neill, for US$733k worth of shares, at about US$9.42 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$5.04). So it may not shed much light on insider confidence at current levels.

Over the last year we saw more insider selling of Editas Medicine shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. 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 Editas Medicine Have Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at Editas Medicine. In total, Independent Director Jessica Hopfield bought US$254k worth of shares in that time. But we did see insider selling worth US$195k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.

Does Editas Medicine Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From looking at our data, insiders own US$1.5m worth of Editas Medicine stock, about 0.4% of the company. I generally like to see higher levels of ownership.

So What Does This Data Suggest About Editas Medicine Insiders?

The recent insider purchase is heartening. On the other hand the transaction history, over the last year, isn't so positive. Neither the level of insider ownership, nor the transactions over the last twelve months inspire us, but we think the recent buying is positive. 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. Every company has risks, and we've spotted 2 warning signs for Editas Medicine you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com