Anyone interested in Phathom Pharmaceuticals, Inc. (NASDAQ:PHAT) should probably be aware that the President, Terrie Curran, recently divested US$397k worth of shares in the company, at an average price of US$11.72 each. The eyebrow raising move amounted to a reduction of 17% in their holding.
The Last 12 Months Of Insider Transactions At Phathom Pharmaceuticals
Notably, that recent sale by Terrie Curran is the biggest insider sale of Phathom Pharmaceuticals shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (US$12.11). 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. 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 17% of Terrie Curran's holding.
Over the last year we saw more insider selling of Phathom Pharmaceuticals shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
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Does Phathom Pharmaceuticals 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. Phathom Pharmaceuticals insiders own about US$30m worth of shares. That equates to 4.2% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Phathom Pharmaceuticals Insiders?
Insiders sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 4 warning signs for Phathom Pharmaceuticals you should be aware of, and 1 of these is potentially serious.
Of course Phathom 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.
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