Executive VP & Chief Medical Officer Steven Stein Sold A Bunch Of Shares In Incyte

We wouldn't blame Incyte Corporation (NASDAQ:INCY) shareholders if they were a little worried about the fact that Steven Stein, the Executive VP & Chief Medical Officer recently netted about US$898k selling shares at an average price of US$72.69. That diminished their holding by a very significant 83%, which arguably implies a strong desire to reallocate capital.

View our latest analysis for Incyte

The Last 12 Months Of Insider Transactions At Incyte

In the last twelve months, the biggest single sale by an insider was when the Executive Officer, Barry Flannelly, sold US$1.1m worth of shares at a price of US$60.00 per share. That means that even when the share price was below the current price of US$72.53, 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. 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. This single sale was 63% of Barry Flannelly's stake.

In the last year Incyte insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. 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: Most of them are flying under the radar).

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. We usually like to see fairly high levels of insider ownership. Incyte insiders own about US$92m worth of shares. That equates to 0.7% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Incyte Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 3 warning signs for Incyte that deserve your attention before buying any shares.

But note: Incyte 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.