Insiders Who Sold US$1.1m Of Verrica Pharmaceuticals Made The Right Call

Despite the fact that Verrica Pharmaceuticals Inc. (NASDAQ:VRCA) stock rose 14% last week, insiders who sold US$1.1m worth of stock in the previous 12 months are likely to be better off. Selling at an average price of US$3.93, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Verrica Pharmaceuticals

Verrica Pharmaceuticals Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Chairman of the Board Paul Manning for US$1.0m worth of shares, at about US$5.02 per share. We do like to see buying, but this purchase was made at well below the current price of US$5.67. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In total, Verrica Pharmaceuticals insiders sold more than they bought over the last year. 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Verrica Pharmaceuticals insiders own 39% of the company, worth about US$88m. 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 Does This Data Suggest About Verrica Pharmaceuticals Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of Verrica Pharmaceuticals insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. While we like knowing 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 3 warning signs for Verrica Pharmaceuticals you should be aware of, and 1 of these can't be ignored.

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.