We wouldn't blame Gilead Sciences, Inc. (NASDAQ:GILD) shareholders if they were a little worried about the fact that Johanna Mercier, the Chief Commercial Officer recently netted about US$1.3m selling shares at an average price of US$66.09. That diminished their holding by a very significant 71%, which arguably implies a strong desire to reallocate capital.
The Last 12 Months Of Insider Transactions At Gilead Sciences
Notably, that recent sale by Johanna Mercier is the biggest insider sale of Gilead Sciences shares that we've seen in the last year. That means that even when the share price was slightly below the current price of US$66.54, 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 71% of Johanna Mercier's holding.
In the last year Gilead Sciences insiders didn't buy any company stock. 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!
I will like Gilead Sciences better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does Gilead Sciences Boast High Insider Ownership?
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Gilead Sciences insiders own 0.04% of the company, worth about US$31m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Gilead Sciences Insiders?
An insider sold Gilead Sciences shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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. While conducting our analysis, we found that Gilead Sciences has 5 warning signs and it would be unwise to ignore them.
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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