Don't Ignore The Insider Selling In BioMarin Pharmaceutical

We wouldn't blame BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) shareholders if they were a little worried about the fact that George Davis, the Executive VP recently netted about US$1.2m selling shares at an average price of US$66.28. That sale reduced their total holding by 22% which is hardly insignificant, but far from the worst we've seen.

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BioMarin Pharmaceutical Insider Transactions Over The Last Year

Notably, that recent sale by Executive VP George Davis was not the only time they sold BioMarin Pharmaceutical shares this year. Earlier in the year, they fetched US$61.36 per share in a -US$1.6m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of US$64.63. 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. This single sale was just 26% of George Davis's stake.

In the last year BioMarin Pharmaceutical insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for BioMarin Pharmaceutical

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Does BioMarin Pharmaceutical Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. BioMarin Pharmaceutical insiders own about US$67m worth of shares. That equates to 0.5% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About BioMarin Pharmaceutical Insiders?

An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. 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. You'd be interested to know, that we found 4 warning signs for BioMarin Pharmaceutical and we suggest you have a look.

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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 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.