We wouldn't blame Precigen, Inc. (NASDAQ:PGEN) shareholders if they were a little worried about the fact that Jeffrey Kindler, the Independent Director recently netted about US$856k selling shares at an average price of US$3.63. That diminished their holding by a very significant 68%, which arguably implies a strong desire to reallocate capital.
The Executive Chairman, Randal Kirk, made the biggest insider sale in the last 12 months. That single transaction was for US$6.2m worth of shares at a price of US$3.41 each. That means that an insider was selling shares at slightly below the current price (US$3.98). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 10% of Randal Kirk's holding.
Over the last year, we can see that insiders have bought 60.22k shares worth US$236k. But insiders sold 2.22m shares worth US$7.6m. Over the last year we saw more insider selling of Precigen shares, than buying. The sellers received a price of around US$3.44, on average. We don't gain confidence from insider selling below the recent share price. Since insiders sell for many reasons, we wouldn't put too much weight on it. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
View our latest analysis for Precigen
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Precigen insiders own about US$173m worth of shares (which is 12% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
The stark truth for Precigen is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of Precigen.
But note: Precigen 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.