Selling US$2.3m worth of Pacira BioSciences, Inc. (NASDAQ:PCRX) stock at high prices would have gotten insiders a handsome reward

By
Simply Wall St
Published
November 07, 2021
NasdaqGS:PCRX
Source: Shutterstock

Despite the fact that Pacira BioSciences, Inc. (NASDAQ:PCRX) stock rose 11% last week, insiders who sold US$2.3m worth of stock in the previous 12 months are likely to be better off. Selling at an average price of US$61.27, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Pacira BioSciences

The Last 12 Months Of Insider Transactions At Pacira BioSciences

The Chairman & CEO, David Stack, made the biggest insider sale in the last 12 months. That single transaction was for US$910k worth of shares at a price of US$61.04 each. So what is clear is that an insider saw fit to sell at around the current price of US$58.09. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Insiders in Pacira BioSciences 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. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NasdaqGS:PCRX Insider Trading Volume November 8th 2021

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).

Does Pacira BioSciences Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.8% of Pacira BioSciences shares, worth about US$22m. 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 Pacira BioSciences Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Pacira BioSciences shares in the last quarter. We don't take much encouragement from the transactions by Pacira BioSciences insiders. The modest level of insider ownership is, at least, some comfort. 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. Case in point: We've spotted 3 warning signs for Pacira BioSciences you should be aware of.

Of course Pacira BioSciences 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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