Don't Ignore The Insider Selling In Mirati Therapeutics

We'd be surprised if Mirati Therapeutics, Inc. (NASDAQ:MRTX) shareholders haven't noticed that the Founder, Charles Baum, recently sold US$367k worth of stock at US$40.42 per share. The eyebrow raising move amounted to a reduction of 11% in their holding.

Check out our latest analysis for Mirati Therapeutics

The Last 12 Months Of Insider Transactions At Mirati Therapeutics

Notably, that recent sale by Founder Charles Baum was not the only time they sold Mirati Therapeutics shares this year. They previously made an even bigger sale of -US$608k worth of shares at a price of US$149 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$42.15). So it may not tell us anything about how insiders feel about the current share price.

Insiders in Mirati Therapeutics didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Mirati Therapeutics

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. It appears that Mirati Therapeutics insiders own 0.6% of the company, worth about US$13m. 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 Do The Mirati Therapeutics Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. 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. In terms of investment risks, we've identified 4 warning signs with Mirati Therapeutics and understanding them should be part of your investment process.

Of course Mirati Therapeutics may not be the best stock to buy. So you may wish to see this free collection of high quality 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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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.