Shareholders Can't Ignore US$1.1m Of Sales By Verrica Pharmaceuticals Insiders

Last week, Verrica Pharmaceuticals Inc.'s (NASDAQ:VRCA) stock jumped 14%, but insiders who sold US$1.1m worth of stock in over the past year are likely to be in a better position. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of US$4.40, which is higher than the current price, may have been the best decision.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Verrica Pharmaceuticals

The Last 12 Months Of Insider Transactions At Verrica Pharmaceuticals

In the last twelve months, the biggest single sale by an insider was when the Director, Ted White, sold US$230k worth of shares at a price of US$7.06 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$0.73). So it may not tell us anything about how insiders feel about the current share price.

In the last year Verrica Pharmaceuticals insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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 Verrica Pharmaceuticals Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Verrica Pharmaceuticals insiders own about US$29m worth of shares (which is 45% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Verrica Pharmaceuticals Insiders?

It doesn't really mean much that no insider has traded Verrica Pharmaceuticals shares in the last quarter. While we feel good about high insider ownership of Verrica Pharmaceuticals, we can't say the same about the selling of shares. 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. To help with this, we've discovered 5 warning signs (3 are potentially serious!) that you ought to be aware of before buying any shares in Verrica Pharmaceuticals.

But note: Verrica 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 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.