Possible Signal As MapLight Therapeutics Insiders Sell US$13m In Stock
Despite the fact that MapLight Therapeutics, Inc. (NASDAQ:MPLT) stock rose 11% last week, insiders who sold US$13m worth of stock in the previous 12 months are likely to be better off. Selling at an average price of US$26.06, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At MapLight Therapeutics
The Founder, Christopher Kroeger, made the biggest insider sale in the last 12 months. That single transaction was for US$5.4m worth of shares at a price of US$37.96 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$7.44). So it may not shed much light on insider confidence at current levels.
Happily, we note that in the last year insiders paid US$843k for 54.74k shares. On the other hand they divested 514.54k shares, for US$13m. In total, MapLight Therapeutics insiders sold more than they bought over the last year. The sellers received a price of around US$26.06, on average. We are not joyful about insider selling. But we note that the selling, on average, was at well above the recently traded price of US$7.44. 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!
View our latest analysis for MapLight Therapeutics
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
MapLight Therapeutics Insiders Are Selling The Stock
The last quarter saw substantial insider selling of MapLight Therapeutics shares. Specifically, insiders ditched US$1.1m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does MapLight Therapeutics Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 2.9% of MapLight Therapeutics shares, worth about US$12m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At MapLight Therapeutics Tell Us?
Insiders haven't bought MapLight Therapeutics stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! 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 5 warning signs for MapLight Therapeutics (2 shouldn't be ignored) you should be aware of.
Of course MapLight Therapeutics 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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