Have Frequency Therapeutics, Inc. (NASDAQ:FREQ) Insiders Been Selling Their Stock?

We wouldn't blame Frequency Therapeutics, Inc. (NASDAQ:FREQ) shareholders if they were a little worried about the fact that Joel Marcus, the Independent Director recently netted about US$525k selling shares at an average price of US$18.87. However, that sale only accounted for 7.9% of their holding, so arguably it doesn't say much about their conviction.

Check out our latest analysis for Frequency Therapeutics

Frequency Therapeutics Insider Transactions Over The Last Year

Notably, that recent sale by Joel Marcus is the biggest insider sale of Frequency Therapeutics shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$19.25. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 7.9% of Joel Marcus's stake.

Over the last year, we can see that insiders have bought 17.96k shares worth US$251k. But they sold 27809 shares for US$525k. 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).

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Frequency Therapeutics insiders own about US$52m worth of shares. That equates to 8.7% 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.

What Might The Insider Transactions At Frequency Therapeutics Tell Us?

An insider sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. When we did our research, we found 2 warning signs for Frequency Therapeutics (1 is a bit unpleasant!) that we believe deserve your full attention.

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, but not derivative transactions.

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