Insiders At Xenon Pharmaceuticals Sold US$1.6m In Stock, Alluding To Potential Weakness

Many Xenon Pharmaceuticals Inc. (NASDAQ:XENE) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Xenon Pharmaceuticals

Xenon Pharmaceuticals Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Steven Gannon, sold US$602k worth of shares at a price of US$46.45 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$40.84. So it is hard to draw any strong conclusion from it.

All up, insiders sold more shares in Xenon Pharmaceuticals than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Xenon Pharmaceuticals

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. Our data suggests Xenon Pharmaceuticals insiders own 0.1% of the company, worth about US$4.1m. We consider this fairly low insider ownership.

So What Do The Xenon Pharmaceuticals Insider Transactions Indicate?

The fact that there have been no Xenon Pharmaceuticals insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Xenon Pharmaceuticals insiders. And we're not picking up on high enough insider ownership to give us any comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 3 warning signs for Xenon Pharmaceuticals (1 is significant!) and we strongly recommend you look at them before investing.

But note: Xenon 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.