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Read This Before Buying Stemline Therapeutics, Inc. (NASDAQ:STML) Shares

Simply Wall St

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It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Stemline Therapeutics, Inc. (NASDAQ:STML).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'

Check out our latest analysis for Stemline Therapeutics

The Last 12 Months Of Insider Transactions At Stemline Therapeutics

In the last twelve months, the biggest single sale by an insider was when the Founder, Ivan Bergstein, sold US$849k worth of shares at a price of US$15.49 per share. So we know that an insider sold shares at around the present share price of US$13.21. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

We note that in the last year insiders divested 354k shares for a total of US$4.5m. In the last year Stemline Therapeutics insiders didn't buy any company stock. The chart below shows insider transactions (by 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!

NasdaqCM:STML Recent Insider Trading, July 15th 2019

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Insiders at Stemline Therapeutics Have Sold Stock Recently

The last quarter saw substantial insider selling of Stemline Therapeutics shares. Specifically, insiders ditched US$1.9m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 9.7% of Stemline Therapeutics shares, worth about US$51m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Stemline Therapeutics Insider Transactions Indicate?

Insiders sold Stemline Therapeutics shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Stemline Therapeutics.

Of course Stemline Therapeutics 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 aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.