This Insider Has Just Sold Shares In Verastem

Anyone interested in Verastem, Inc. (NASDAQ:VSTM) should probably be aware that the President, Daniel Paterson, recently divested US$353k worth of shares in the company, at an average price of US$8.00 each. That sale was 12% of their holding, so it does make us raise an eyebrow.

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Verastem Insider Transactions Over The Last Year

In fact, the recent sale by Daniel Paterson was the biggest sale of Verastem shares made by an insider individual in the last twelve months, according to our records. So what is clear is that an insider saw fit to sell at around the current price of US$8.00. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Insiders in Verastem didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Verastem

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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. Our data indicates that Verastem insiders own about US$5.3m worth of shares (which is 0.7% of the company). We do generally prefer see higher levels of insider ownership.

So What Do The Verastem Insider Transactions Indicate?

Insiders sold Verastem shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. So we're not rushing to buy, to say the least. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 4 warning signs for Verastem (2 are potentially serious!) and we strongly recommend you look at them before investing.

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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.