We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Vanda Pharmaceuticals Inc. (NASDAQ:VNDA).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
Vanda Pharmaceuticals Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Founder, Mihael Polymeropoulos, sold US$872k worth of shares at a price of US$20.22 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$14.88. So it may not tell us anything about how insiders feel about the current share price.
In the last twelve months insiders netted US$2.2m for 103k shares sold. In the last year Vanda Pharmaceuticals insiders didn’t buy any company stock. You can see a visual depiction of insider transactions (by 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!
Vanda Pharmaceuticals Insiders Are Selling The Stock
We have seen a bit of insider selling at Vanda Pharmaceuticals, over the last three months. Senior VP Timothy Williams divested only US$38k worth of shares in that time. It’s not great to see insider selling, nor the lack of recent buyers. But the selling simply isn’t sufficiently substantial to be of much use as a signal.
Insider Ownership of Vanda Pharmaceuticals
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Vanda Pharmaceuticals insiders own about US$21m worth of shares. That equates to 2.6% 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 Do The Vanda Pharmaceuticals Insider Transactions Indicate?
We did not see any insider buying in the last three months, but we did see selling. But the sales were small, so we’re not concerned. Recent sales exacerbate our caution arising from analysis of Vanda Pharmaceuticals insider transactions. But it’s good to see that insiders own shares in the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Vanda Pharmaceuticals.
But note: Vanda 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, but not derivative transactions.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.