Some Denali Therapeutics Inc. (NASDAQ:DNLI) shareholders may be a little concerned to see that the Co-Founder, Ryan Watts, recently sold a substantial US$581k worth of stock at a price of US$16.50 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 1.5%.

The Last 12 Months Of Insider Transactions At Denali Therapeutics

Notably, that recent sale by Ryan Watts is the biggest insider sale of Denali Therapeutics shares that we've seen in the last year. That means that even when the share price was below the current price of US$17.08, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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. We note that the biggest single sale was only 1.5% of Ryan Watts's holding.

Insiders in Denali Therapeutics didn't buy any shares in 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!

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Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Denali Therapeutics insiders own 4.6% of the company, currently worth about US$122m 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.

So What Do The Denali Therapeutics Insider Transactions Indicate?

Insiders sold Denali Therapeutics shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. 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 it's good to be aware of 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. At Simply Wall St, we've found that Denali Therapeutics has 3 warning signs (1 is a bit concerning!) that deserve your attention before going any further with your analysis.

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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.

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.