By selling US$5.2m worth of Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) stock at an average sell price of US$18.09 over the last year, insiders seemed to have made the most of their holdings. After the stock price dropped 10.0% last week, the company's market value declined by US$90m, but insiders were able to mitigate their losses.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
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$3.2m worth of shares at a price of US$18.00 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$14.49). So it may not tell us anything about how insiders feel about the current share price.
Vanda Pharmaceuticals insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Vanda Pharmaceuticals better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership of Vanda Pharmaceuticals
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It appears that Vanda Pharmaceuticals insiders own 3.2% of the company, worth about US$26m. 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 Vanda Pharmaceuticals Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of Vanda Pharmaceuticals insider transactions leaves us cautious. But it's good to see that insiders own shares in 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 1 warning sign for Vanda Pharmaceuticals you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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