We wouldn't blame Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) shareholders if they were a little worried about the fact that Reshma Kewalramani, the CEO, President & Director recently netted about US$6.3m selling shares at an average price of US$532. That sale reduced their total holding by 22% which is hardly insignificant, but far from the worst we've seen.
Vertex Pharmaceuticals Insider Transactions Over The Last Year
Notably, that recent sale by Reshma Kewalramani is the biggest insider sale of Vertex Pharmaceuticals shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of US$547. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 22% of Reshma Kewalramani's holding.
Vertex Pharmaceuticals insiders didn't buy any shares over the last year. 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 Vertex Pharmaceuticals
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Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Vertex Pharmaceuticals insiders own 0.2% of the company, currently worth about US$274m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Vertex Pharmaceuticals Tell Us?
An insider sold Vertex Pharmaceuticals shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But since Vertex Pharmaceuticals is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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