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

Even though Pacific Biosciences of California, Inc. (NASDAQ:PACB) has fallen by 12% over the past week , insiders who sold US$1.5m worth of stock over the past year have had less luck. The average selling price of US$3.62 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Pacific Biosciences of California

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

Over the last year, we can see that the biggest insider sale was by the President, Christian O. Henry, for US$481k worth of shares, at about US$5.96 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$1.85. So it may not tell us anything about how insiders feel about the current share price.

In total, Pacific Biosciences of California insiders sold more than they bought 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!

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 Pacific Biosciences of California Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Pacific Biosciences of California. In total, Chief Operating Officer Mark Van Oene dumped US$70k 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 Pacific Biosciences of California Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own US$3.2m worth of Pacific Biosciences of California stock, about 0.6% of the company. I generally like to see higher levels of ownership.

What Might The Insider Transactions At Pacific Biosciences of California Tell Us?

An insider sold Pacific Biosciences of California shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. When you consider that most companies have higher levels of insider ownership, we're a little wary. So we're not rushing to buy, to say the least. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Pacific Biosciences of California has 4 warning signs and it would be unwise to ignore them.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.