Several Insiders Invested In Phathom Pharmaceuticals Flagging Positive News
Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Phathom Pharmaceuticals, Inc. (NASDAQ:PHAT), it sends a favourable message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Phathom Pharmaceuticals
The Last 12 Months Of Insider Transactions At Phathom Pharmaceuticals
Over the last year, we can see that the biggest insider sale was by the Chief Financial & Business Officer, Molly Henderson, for US$111k worth of shares, at about US$8.95 per share. That means that an insider was selling shares at around the current price of US$8.27. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. 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).
In the last twelve months insiders purchased 41.42k shares for US$323k. On the other hand they divested 20.44k shares, for US$174k. In the last twelve months there was more buying than selling by Phathom Pharmaceuticals insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Phathom Pharmaceuticals Insiders Are Selling The Stock
We've seen more insider selling than insider buying at Phathom Pharmaceuticals recently. In total, Chief Financial & Business Officer Molly Henderson sold US$126k worth of shares in that time. Meanwhile Independent Director Asit Parikh bought US$59k worth. We don't view these transactions as a positive sign.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Phathom Pharmaceuticals insiders own about US$18m worth of shares. That equates to 4.0% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Phathom Pharmaceuticals Tell Us?
The stark truth for Phathom Pharmaceuticals is that there has been more insider selling than insider buying in the last three months. On the other hand, the insider transactions over the last year are encouraging. And insiders do own shares. So the recent selling doesn't worry us too much. 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. Every company has risks, and we've spotted 7 warning signs for Phathom Pharmaceuticals (of which 3 don't sit too well with us!) you should know about.
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 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.
