Ligand Pharmaceuticals Insiders Sell US$6.3m Of Stock, Possibly Signalling Caution

In the last year, many Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Ligand Pharmaceuticals

Ligand Pharmaceuticals Insider Transactions Over The Last Year

The insider, Matthew Korenberg, made the biggest insider sale in the last 12 months. That single transaction was for US$2.0m worth of shares at a price of US$106 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$120. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 28% of Matthew Korenberg's holding.

Over the last year we saw more insider selling of Ligand Pharmaceuticals shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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).

Insiders At Ligand Pharmaceuticals Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Ligand Pharmaceuticals. In total, insiders dumped US$267k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Ligand Pharmaceuticals Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 2.0% of Ligand Pharmaceuticals shares, worth about US$45m. 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 Ligand Pharmaceuticals Insiders?

Insiders sold Ligand Pharmaceuticals shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. But since Ligand Pharmaceuticals is profitable and growing, we're not too worried by this. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Ligand Pharmaceuticals. In terms of investment risks, we've identified 3 warning signs with Ligand Pharmaceuticals and understanding these should be part of your investment process.

But note: Ligand Pharmaceuticals 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.