Have Insiders Been Selling Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) Shares?

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Intra-Cellular Therapies, Inc. (NASDAQ:ITCI), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for Intra-Cellular Therapies

Intra-Cellular Therapies Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Director, Joel Marcus, for US$1.1m worth of shares, at about US$20.63 per share. That means that an insider was selling shares at slightly below the current price (US$32.02). 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. We note that the biggest single sale was only 48% of Joel Marcus's holding.

In the last year Intra-Cellular Therapies 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!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders at Intra-Cellular Therapies Have Sold Stock Recently

The last three months saw significant insider selling at Intra-Cellular Therapies. In total, insiders dumped US$328k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Intra-Cellular Therapies insiders own about US$110m worth of shares (which is 4.2% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Intra-Cellular Therapies Insider Transactions Indicate?

Insiders haven't bought Intra-Cellular Therapies 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. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Intra-Cellular Therapies. You'd be interested to know, that we found 4 warning signs for Intra-Cellular Therapies and we suggest you have a look.

But note: Intra-Cellular Therapies 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, but not derivative transactions.

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