Don't Ignore The Insider Selling In Fennec Pharmaceuticals

Anyone interested in Fennec Pharmaceuticals Inc. (NASDAQ:FENC) should probably be aware that the Director, Rostislav Raykov, recently divested US$113k worth of shares in the company, at an average price of US$6.78 each. The eyebrow raising move amounted to a reduction of 19% in their holding.

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Fennec Pharmaceuticals Insider Transactions Over The Last Year

In fact, the recent sale by Rostislav Raykov was the biggest sale of Fennec Pharmaceuticals shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at slightly below the current price (US$8.17). 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. It is worth noting that this sale was only 19% of Rostislav Raykov's holding.

In the last twelve months insiders purchased 17.17k shares for US$110k. But they sold 38.08k shares for US$242k. Over the last year we saw more insider selling of Fennec Pharmaceuticals shares, than buying. 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!

See our latest analysis for Fennec Pharmaceuticals

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Insider Ownership Of Fennec Pharmaceuticals

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own US$3.7m worth of Fennec Pharmaceuticals stock, about 1.6% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. I generally like to see higher levels of ownership.

What Might The Insider Transactions At Fennec Pharmaceuticals Tell Us?

Our data shows a little more insider selling than buying in the last three months. But the difference is small, and thus, not concerning. Recent sales exacerbate our caution arising from analysis of Fennec Pharmaceuticals insider transactions. And we're not picking up on high enough insider ownership to give us any comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 2 warning signs we've spotted with Fennec Pharmaceuticals (including 1 which doesn't sit too well with us).

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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.