How Many Insiders Sold Exelixis, Inc. (NASDAQ:EXEL) Shares?
It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Exelixis, Inc. (NASDAQ:EXEL), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
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The Last 12 Months Of Insider Transactions At Exelixis
Over the last year, we can see that the biggest insider sale was by Executive VP Jeffrey Hessekiel for US$1.3m worth of shares, at about US$20.71 per share. That means that an insider was selling shares at slightly below the current price (US$24.07). Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. When an insider sells below the current price, it does tend to make us wonder about the current valuation. Please note, however, that this single sale was just 25.2% of Jeffrey Hessekiel’s stake.
Over the last year, we note insiders sold 263.10k shares worth US$5.5m. In total, Exelixis insiders sold more than they bought over the last year. The sellers received a price of around US$21.02, on average. We don’t gain much confidence from insider selling near the recent share price. While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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Exelixis Insiders Are Selling The Stock
The last three months saw significant insider selling at Exelixis. Specifically, insiders ditched US$805k worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.
Does Exelixis Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Exelixis insiders own about US$91m worth of shares. That equates to 1.5% of the company. 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 Exelixis Insiders?
Insiders sold Exelixis shares recently, but they didn’t buy any. And even if we look to the last year, we didn’t see any purchases. But since Exelixis is profitable and growing, we’re not too worried by this. While insiders do own shares, they don’t own a heap, and they have been selling. We’re in no rush to buy! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Exelixis.
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To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
