Selling Scholar Rock Holding Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Scholar Rock Holding Corporation's (NASDAQ:SRRK) value has fallen 15% in the last week, but insiders who sold US$1.2m worth of stock over the last year have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of US$14.27 is still lower than the current share price.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Scholar Rock Holding

Scholar Rock Holding Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chief Scientific Officer, Mo Qatanani, for US$295k worth of shares, at about US$18.18 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$7.42). So it may not tell us anything about how insiders feel about the current share price.

In the last year Scholar Rock Holding insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Insiders At Scholar Rock Holding Have Sold Stock Recently

We have seen a bit of insider selling at Scholar Rock Holding, over the last three months. Insiders divested only US$30k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the amount sold isn't enough for us to put any weight on it.

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. Our data indicates that Scholar Rock Holding insiders own about US$8.0m worth of shares (which is 1.3% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Scholar Rock Holding Insiders?

While there has not been any insider buying in the last three months, there has been selling. But given the selling was modest, we're not worried. Recent sales exacerbate our caution arising from analysis of Scholar Rock Holding insider transactions. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. 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. For instance, we've identified 4 warning signs for Scholar Rock Holding (2 can't be ignored) you should be aware of.

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.