We wouldn't blame Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) shareholders if they were a little worried about the fact that Todd Watanabe, the President recently netted about US$506k selling shares at an average price of US$25.50. However, that sale only accounted for 3.0% of their holding, so arguably it doesn't say much about their conviction.

Arcutis Biotherapeutics Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Executive VP & Chief Commercial Officer, Larry Edwards, sold US$733k worth of shares at a price of US$25.16 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$26.88. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 40% of Larry Edwards's stake.

In the last year Arcutis Biotherapeutics insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Arcutis Biotherapeutics better if I see some big insider buys.

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. It appears that Arcutis Biotherapeutics insiders own 1.6% of the company, worth about US$53m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Arcutis Biotherapeutics Insider Transactions Indicate?

Insiders haven't bought Arcutis Biotherapeutics stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. 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 Arcutis Biotherapeutics.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.