Have Verona Pharma Insiders Been Selling Stock?

Some Verona Pharma plc (NASDAQ:VRNA) shareholders may be a little concerned to see that the Chief Financial Officer, Mark Hahn, recently sold a substantial US$4.4m worth of stock at a price of US$40.05 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 7.9%.

View our latest analysis for Verona Pharma

Verona Pharma Insider Transactions Over The Last Year

Notably, that recent sale by Mark Hahn is the biggest insider sale of Verona Pharma shares that we've seen in the last year. That means that even when the share price was slightly below the current price of US$40.50, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 7.9% of Mark Hahn's stake.

Happily, we note that in the last year insiders paid US$524k for 17.16k shares. But insiders sold 2.64m shares worth US$24m. Over the last year we saw more insider selling of Verona Pharma shares, than buying. The average sell price was around US$9.10. We don't gain confidence from insider selling below the recent share price. Since insiders sell for many reasons, we wouldn't put too much weight on it. 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 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).

Insider Ownership Of Verona Pharma

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. Verona Pharma insiders own 4.4% of the company, currently worth about US$145m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Verona Pharma Tell Us?

The insider sales have outweighed the insider buying, at Verona Pharma, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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 found 1 warning sign for Verona Pharma that deserve your attention before buying any shares.

Of course Verona Pharma may not be the best stock to buy. So you may wish to see this free collection of high quality 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.