Some Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) shareholders may be a little concerned to see that the Senior VP, Charles Berkman, recently sold a substantial US$3.2m worth of stock at a price of US$179 per share. That sale reduced their total holding by 39% which is hardly insignificant, but far from the worst we've seen.
Ligand Pharmaceuticals Insider Transactions Over The Last Year
Notably, that recent sale by Charles Berkman is the biggest insider sale of Ligand Pharmaceuticals shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (US$203). 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. It is worth noting that this sale was only 39% of Charles Berkman's holding.
Charles Berkman ditched 29.24k shares over the year. The average price per share was US$156. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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Does Ligand Pharmaceuticals Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Ligand Pharmaceuticals insiders own 4.6% of the company, currently worth about US$150m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Ligand Pharmaceuticals Tell Us?
An insider hasn't bought Ligand Pharmaceuticals stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 2 warning signs for Ligand Pharmaceuticals (of which 1 is a bit concerning!) you should know about.
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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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What are the risks and opportunities for Ligand Pharmaceuticals?
Trading at 55.4% below our estimate of its fair value
Earnings are forecast to grow 101.49% per year
Significant insider selling over the past 3 months
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Ligand Pharmaceuticals Incorporated, a biopharmaceutical company, focuses on developing or acquiring technologies that help pharmaceutical companies to discover and develop medicines worldwide.
Excellent balance sheet and fair value.