Selling US$1.0m Of Avidity Biosciences Stock Rewarded Insiders

While Avidity Biosciences, Inc. (NASDAQ:RNA) shareholders have enjoyed a good week with stock up 12%, they need remain vigilant. Even though stock prices were relatively low, insiders elected to sell US$1.0m worth of stock in the last year, which could indicate some expected downturn.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Avidity Biosciences

Avidity Biosciences Insider Transactions Over The Last Year

The Distinguished Scientist, Arthur Levin, made the biggest insider sale in the last 12 months. That single transaction was for US$542k worth of shares at a price of US$27.11 each. That means that even when the share price was below the current price of US$46.72, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 7.3% of Arthur Levin's stake.

Avidity Biosciences 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!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Does Avidity Biosciences Boast High 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. Avidity Biosciences insiders own about US$23m worth of shares. That equates to 0.4% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Avidity Biosciences Insiders?

It doesn't really mean much that no insider has traded Avidity Biosciences shares in the last quarter. Still, the insider transactions at Avidity Biosciences in the last 12 months are not very heartening. But it's good to see that insiders own shares in the company. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 2 warning signs for Avidity Biosciences you should be aware of, and 1 of these makes us a bit uncomfortable.

Of course Avidity 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 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.