The fact that multiple Xenon Pharmaceuticals Inc. (NASDAQ:XENE) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

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.

Check out our latest analysis for Xenon Pharmaceuticals

Xenon Pharmaceuticals Insider Transactions Over The Last Year

The Chairman of the Board, Simon Pimstone, made the biggest insider sale in the last 12 months. That single transaction was for US$1.9m worth of shares at a price of US$39.90 each. That means that an insider was selling shares at slightly below the current price (US$45.09). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was 89% of Simon Pimstone's holding.

Insiders in Xenon Pharmaceuticals didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Xenon Pharmaceuticals Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Xenon Pharmaceuticals. In total, Independent Director Gary Patou sold US$312k 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

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.3% of Xenon Pharmaceuticals shares, worth about US$9.8m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Xenon Pharmaceuticals Insider Transactions Indicate?

An insider sold Xenon Pharmaceuticals shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. When you combine this with the relatively low insider ownership, we are very cautious about the stock. So we'd only buy after very careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Xenon Pharmaceuticals. Every company has risks, and we've spotted 4 warning signs for Xenon Pharmaceuticals (of which 1 is a bit unpleasant!) you should know about.

Of course Xenon Pharmaceuticals 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 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.