We wouldn't blame Verona Pharma plc (NASDAQ:VRNA) shareholders if they were a little worried about the fact that David Zaccardelli, the President recently netted about US$1.3m selling shares at an average price of US$3.20. That's a big disposal, and it decreased their holding size by 20%, which is notable but not too bad.

The Last 12 Months Of Insider Transactions At Verona Pharma

In fact, the recent sale by David Zaccardelli was the biggest sale of Verona Pharma shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was below the current price of US$27.25, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 20% of David Zaccardelli's holding.

In the last year Verona Pharma insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Verona Pharma 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.

Does Verona Pharma Boast High 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. Verona Pharma insiders own about US$201m worth of shares (which is 9.1% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Verona Pharma Insiders?

Insiders sold Verona Pharma shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Verona Pharma is showing 3 warning signs in our investment analysis, and 1 of those is concerning...

Of course Verona Pharma 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.