It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Exelixis, Inc. (NASDAQ:EXEL), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Exelixis Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Independent Director, Charles Cohen, sold US$5.5m worth of shares at a price of US$22.41 per share. That means that even when the share price was below the current price of US$23.57, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it’s only a weak signal. We note that the biggest single sale was 100% of Charles Cohen’s holding.
In the last twelve months insiders netted US$10m for 484k shares sold. Exelixis insiders didn’t buy any shares over the last year. You can see a visual depiction of insider transactions (by 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Exelixis Have Sold Stock Recently
Over the last three months, we’ve seen significant insider selling at Exelixis. Specifically, insiders ditched US$5.6m worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the directors think that the shares are a bargain.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It appears that Exelixis insiders own 1.4% of the company, worth about US$96m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Exelixis Tell Us?
Insiders haven’t bought Exelixis stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn’t show any insider buying. But it is good to see that Exelixis is growing earnings. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’re in no rush to buy! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Exelixis.
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.
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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.