A number of Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) insiders sold their shares in the last year, which may have raised concerns among investors. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Arcutis Biotherapeutics Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Senior VP & Chief Medical Officer, Patrick Burnett, sold US$435k worth of shares at a price of US$8.72 per share. So we know that an insider sold shares at around the present share price of US$8.28. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

All up, insiders sold more shares in Arcutis Biotherapeutics than they bought, over the last year. 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!

I will like Arcutis Biotherapeutics better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Arcutis Biotherapeutics Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Arcutis Biotherapeutics shares. In total, insiders sold US$561k 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.

Does Arcutis Biotherapeutics Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Arcutis Biotherapeutics insiders own about US$19m worth of shares. That equates to 2.0% 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.

So What Does This Data Suggest About Arcutis Biotherapeutics Insiders?

Insiders haven't bought Arcutis Biotherapeutics stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 3 warning signs for Arcutis Biotherapeutics (1 is significant) you should be aware of.

But note: Arcutis Biotherapeutics may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.

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