Independent Director Of Exelixis Sold 83% Of Their Shares

We wouldn't blame Exelixis, Inc. (NASDAQ:EXEL) shareholders if they were a little worried about the fact that Julie Smith, the Independent Director recently netted about US$576k selling shares at an average price of US$21.12. That diminished their holding by a very significant 83%, which arguably implies a strong desire to reallocate capital.

See our latest analysis for Exelixis

The Last 12 Months Of Insider Transactions At Exelixis

Over the last year, we can see that the biggest insider sale was by the Executive Vice President of Commercial, Patrick Haley, for US$1.0m worth of shares, at about US$21.45 per share. That means that an insider was selling shares at around the current price of US$20.57. While we don't usually like to see insider selling, it's more concerning if the sales take place 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).

Exelixis insiders didn't buy any shares 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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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. A high insider ownership often makes company leadership more mindful of shareholder interests. Exelixis insiders own about US$103m worth of shares (which is 1.7% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Exelixis Insiders?

An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Exelixis is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Exelixis has 1 warning sign we think you should be aware of.

But note: Exelixis 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.

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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.