Selling Pacific Biosciences of California Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Pacific Biosciences of California, Inc.'s (NASDAQ:PACB) value has fallen 17% in the last week, but insiders who sold US$1.1m worth of stock over the last year have had less success. Insiders might have been better off holding onto their shares, given that the average selling price of US$1.82 is still below the current share price.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Pacific Biosciences of California

The President, Christian O. Henry, made the biggest insider sale in the last 12 months. That single transaction was for US$488k worth of shares at a price of US$1.88 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$1.20). So it is hard to draw any strong conclusion from it.

Pacific Biosciences of California insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for Pacific Biosciences of California

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Insiders At Pacific Biosciences of California Have Sold Stock Recently

The last three months saw significant insider selling at Pacific Biosciences of California. In total, insiders dumped US$754k 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.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, Pacific Biosciences of California insiders have about 0.7% of the stock, worth approximately US$2.8m. We prefer to see high levels of insider ownership.

So What Do The Pacific Biosciences of California Insider Transactions Indicate?

Insiders sold Pacific Biosciences of California shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. We'd certainly practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Pacific Biosciences of California has 3 warning signs and it would be unwise to ignore these.

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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 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.