Stock Analysis

Don't Ignore The Fact That This Insider Just Sold Some Shares In Insmed Incorporated (NASDAQ:INSM)

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NasdaqGS:INSM
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We'd be surprised if Insmed Incorporated (NASDAQ:INSM) shareholders haven't noticed that the Independent Director, Melvin Sharoky, recently sold US$312k worth of stock at US$39.05 per share. However, the silver lining is that the sale only reduced their total holding by 3.4%, so we're hesitant to read anything much into it, on its own.

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Insmed Insider Transactions Over The Last Year

In fact, the recent sale by Independent Director Melvin Sharoky was not their only sale of Insmed shares this year. Earlier in the year, they fetched US$31.03 per share in a -US$614k sale. That means that even when the share price was below the current price of US$38.58, 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 7.7% of Melvin Sharoky's holding.

Melvin Sharoky sold a total of 28.00k shares over the year at an average price of US$33.07. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NasdaqGS:INSM Insider Trading Volume November 26th 2020

I will like Insmed 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 Insmed Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Insmed insiders own 0.9% of the company, worth about US$34m. 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 Does This Data Suggest About Insmed Insiders?

An insider hasn't bought Insmed stock in the last three months, but there was some selling. 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. We're in no rush to buy! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 4 warning signs with Insmed and understanding them should be part of your investment process.

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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