Insider Sellers Might Regret Selling Phathom Pharmaceuticals Shares at a Lower Price Than Current Market Value

Phathom Pharmaceuticals, Inc.'s (NASDAQ:PHAT) stock price has dropped 12% in the previous week, but insiders who sold US$816k in stock over the past year have had less luck. Given that the average selling price of US$10.78 is still lower than the current share price, insiders would probably have been better off keeping their shares.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Phathom Pharmaceuticals

The Last 12 Months Of Insider Transactions At Phathom Pharmaceuticals

The President, Terrie Curran, made the biggest insider sale in the last 12 months. That single transaction was for US$397k worth of shares at a price of US$11.72 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 good news is that this large sale was at well above current price of US$7.89. So it may not shed much light on insider confidence at current levels.

In the last year Phathom Pharmaceuticals insiders didn't buy any company stock. 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!

I will like Phathom Pharmaceuticals better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership Of Phathom Pharmaceuticals

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Phathom Pharmaceuticals insiders own 3.7% of the company, worth about US$20m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Phathom Pharmaceuticals Insider Transactions Indicate?

The fact that there have been no Phathom Pharmaceuticals insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Phathom Pharmaceuticals insiders. But it's good to see that insiders own shares in the company. 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 Phathom Pharmaceuticals you should be aware of, and 1 of them can't be ignored.

But note: Phathom Pharmaceuticals may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.