4D Molecular Therapeutics Insiders Sold US$757k Of Shares Suggesting Hesitancy
The fact that multiple 4D Molecular Therapeutics, Inc. (NASDAQ:FDMT) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
4D Molecular Therapeutics Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Co-Founder, David Kirn, sold US$737k worth of shares at a price of US$12.87 per share. That means that an insider was selling shares at slightly below the current price (US$14.49). 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. It is worth noting that this sale was only 3.8% of David Kirn's holding.
4D Molecular Therapeutics insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
See our latest analysis for 4D Molecular Therapeutics
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Insiders At 4D Molecular Therapeutics Have Sold Stock Recently
The last quarter saw substantial insider selling of 4D Molecular Therapeutics shares. Specifically, Co-Founder David Kirn ditched US$737k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Insider Ownership
Many investors like to check how much of a company is owned by 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. Insiders own 2.8% of 4D Molecular Therapeutics shares, worth about US$23m. 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 4D Molecular Therapeutics Tell Us?
An insider sold 4D Molecular Therapeutics shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing 4D Molecular Therapeutics. In terms of investment risks, we've identified 3 warning signs with 4D Molecular Therapeutics and understanding these should be part of your investment process.
But note: 4D Molecular Therapeutics 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.