IGM Biosciences Insiders Who Sold Avert US$165m Market Cap Dip

By selling US$709k worth of IGM Biosciences, Inc. (NASDAQ:IGMS) stock at an average sell price of US$8.10 over the last year, insiders seemed to have made the most of their holdings. The company’s market cap plunged by US$165m after price dropped by 18% last week but insiders were able to limit their loss to an extent.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for IGM Biosciences

IGM Biosciences Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Fred Schwarzer, for US$102k worth of shares, at about US$5.78 per share. That means that even when the share price was below the current price of US$12.88, an insider wanted to cash in some shares. 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. 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. We note that the biggest single sale was only 7.0% of Fred Schwarzer's holding.

In the last year IGM Biosciences insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like IGM Biosciences better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

IGM Biosciences Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at IGM Biosciences. Specifically, insiders ditched US$130k 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 insiders think that the shares are a bargain.

Insider Ownership Of IGM Biosciences

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that IGM Biosciences insiders own 2.5% of the company, worth about US$19m. 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 IGM Biosciences Tell Us?

Insiders haven't bought IGM Biosciences stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing IGM Biosciences. Every company has risks, and we've spotted 4 warning signs for IGM Biosciences (of which 1 is a bit concerning!) you should know about.

But note: IGM Biosciences 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.