Some Royalty Pharma plc (NASDAQ:RPRX) shareholders may be a little concerned to see that the Executive VP of Investments & General Counsel, George Lloyd, recently sold a substantial US$9.4m worth of stock at a price of US$42.29 per share. That sale reduced their total holding by 12% which is hardly insignificant, but far from the worst we've seen.
Royalty Pharma Insider Transactions Over The Last Year
Notably, that recent sale by Executive VP of Investments & General Counsel George Lloyd was not the only time they sold Royalty Pharma shares this year. They previously made an even bigger sale of -US$12m worth of shares at a price of US$46.77 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$42.08). So it is hard to draw any strong conclusion from it.
In total, Royalty Pharma insiders sold more than they bought 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!NasdaqGS:RPRX Insider Trading Volume November 25th 2021
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Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Royalty Pharma insiders own 11% of the company, worth about US$2.9b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Royalty Pharma Insider Transactions Indicate?
Insiders sold Royalty Pharma shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To assist with this, we've discovered 4 warning signs that you should run your eye over to get a better picture of Royalty Pharma.
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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, but not derivative transactions.
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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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