Selling Skye Bioscience Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Despite the fact that Skye Bioscience, Inc.'s (NASDAQ:SKYE) value has dropped 13% in the last week insiders who sold US$1.2m worth of stock in the past 12 months have had less success. Given that the average selling price of US$4.99 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, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Skye Bioscience

Skye Bioscience Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Chairman of the Board, Paul Grayson, for US$432k worth of shares, at about US$5.55 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$2.78. So it may not shed much light on insider confidence at current levels.

Skye Bioscience insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. 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).

Does Skye Bioscience Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests Skye Bioscience insiders own 3.1% of the company, worth about US$2.7m. I generally like to see higher levels of ownership.

So What Do The Skye Bioscience Insider Transactions Indicate?

The fact that there have been no Skye Bioscience insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Skye Bioscience insiders. And usually insiders own more stock in the company, according to our data. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that Skye Bioscience has 6 warning signs (2 are concerning!) that deserve your attention before going any further with your analysis.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.