Considering investing in ARDX stock? There may be certain drawbacks that may affect that choice. As per recent news, a large portion of shares in the company have been sold. This is detrimental to the shareholders’ assets. Read about the situation in detail.
About Ardelyx Inc.
Ardelyx Inc. is a biopharmaceutical company focused on the development and commercialization of innovative treatments for patients with kidney and gastrointestinal diseases. ARDX stocks have always been lucrative. Founded in 2007, Ardelyx targets unmet medical needs with targeted therapies that modulate specific pathways in the body.
ARDX stock: about Ardelyx’s products
The Company’s lead product, IBSRELA ™, tenapanor, is an FDA-approved medicine for the treatment of irritable bowel syndrome with constipation, or IBS-C, in adults. Ardelyx is also advancing XPHOZAH ™ (tenapanor) to treat hyperphosphatemia in patients with chronic kidney disease on dialysis.
ARDX stock fluctuation
While its products seemed promising, Ardelyx has dealt with setbacks, one of those being a request from the FDA for more data related to XPHOZAH. The company remains committed to resolving these challenges that affect the value of the ARDX stock and is simultaneously evaluating opportunities for business development.
Have Insiders Sold Ardelyx Stock?
There has been some Ardelyx, Inc. insider activity lately that has affected the ARDX stock. In particular, note the disposition in ARDX shares by its President, Michael Raab. In a transaction dated Nov. 14, Raab sold 32,108 shares of Ardelyx at $5.86 each.
This is a fairly impressive volume, which is detrimental to the value of ARDX stock. For context, that would only bump his stake in ARDX down roughly 2.5%. The transaction in and of itself is not cause for alarm or indicative of any trend.
Insider Activity for Ardelyx Over the Last Year
Insider buying and selling are good ways to calibrate one’s perception of the market sentiment about a particular stock. Therefore, looking at insider transactions over the last year gives a better overview.
There have been rather significant sales, judging by Ardelyx’s standards. The company’s Senior Vice President of Finance and Chief Accounting Officer, Robert Felsch, has sold shares worth $782,000 at $8.81 per share.
What does insider selling mean for ARDX stock?
While insider selling can be a concern at times, it is less of an issue when one sells at a higher price compared to the current market value. That is the case in Felsch’s transaction in that he sold his shares at a price considerably higher than where the ARDX stock currently trades at $6.15.
This could indicate that the sale was due to personal finance reasons and not a lack of confidence in the future prospects of the company.
ARDX stock may suffer
It is also worth noting that the company has not seen any insider buys of Ardelyx stock in the last year. The absence of insider buying could imply that its executives and board members do not strongly feel that the ARDX stock is undervalued. Generally speaking, insider buying indicates that people who know the company best think the ARDX stock is cheap and will go up.
Insider Selling Volume at Ardelyx
From the chart below, over the last twelve months, insider trading has been absolutely one way – selling and not buying. Investors generally like to see insider buying and not selling. It might well suggest that insiders are cashing out at relatively high prices rather than buying in at what they consider a low point.
For those interested, there are resources available that track insider trading across a range of companies, often flagging those that may be flying under the radar yet have seen significant insider buying.
Does ARDX stock have high Insider Ownership?
Insider ownership is often considered a strong indicator of whether a company’s management has skin in the game and is therefore aligned with its shareholders. In general, the higher the insider ownership, the more a company’s management will profit if the company is successful over the long term, and ARDX stocktwits is a testament to that.
The current situation of the ARDX stock
Insiders currently own about 2.4% of Ardelyx’s total outstanding shares, translating into a market value of approximately $34 million. While this is by no means a small amount, it’s none too significant either, especially for a company of Ardelyx’s size.
Impacts on Ardelyx’s morale
This level of ownership does indicate some degree of alignment between management and smaller shareholders of the company, but doesn’t signify a strong level of commitment or confidence from the company’s insiders.
What does the recent Insider Activity tell us about ARDX stocks?
The recent insider activity of Ardelyx paints a cautious picture. There has been some insider selling, but no buying in the last year. This may be indicating that the insiders don’t think the ARDX stock will outperform in the future.
While the insiders do own shares, the amount isn’t enough to meaningfully align their interests with those of the general shareholder base. This might raise a red flag to potential investors because the insiders are selling without a corresponding trend of buying ARDX stocks.
More things to keep in mind about ARDX stocks
It is also good to put in view the bigger picture of the company’s financial health and the general market condition. Insider selling does not actually mean the insider thinks the ARDX stock will go down; for instance, he may need cash for personal financial planning or portfolio diversification.
Lack of buying, however, may indicate that they don’t see much upside in the ARDX stock in the near term.
Risks about ARDX stock
Investors considering Ardelyx will need to counterbalance that feeling against the risks the company faces. At the moment, there are three warning signs that many investors might want to keep in mind regarding Ardelyx.
These may relate to financial health, market conditions, or even company-specific issues that could have an influence on the stock’s performance.
Opportunities with ARDX stock
While Ardelyx currently is not an ideal stock to buy when it comes to insider trading activities and insider ownership, there might be even more qualitative companies out there that would better fit the investment interests of those searching for strong insider convictions.
As such, interested investors may look at other lists, particularly those that indicate notable insider buying, as such is often indicative of good future growth and performance of the company.
Inference about ARDX stock
In short, while insider selling at Ardelyx-even those at high levels raises one or two eyebrows, it is not really a vote of no confidence in the company. However, the complete absence of insider buying does raise one or two questions about the insiders and their views of the stock’s potential.
These considerations must be weighed carefully by investors with other financial and market information in order to decide the fate of their investments in Ardelyx.
ARDX Stock: An Analysis
The sale of shares by a company may result in various effects on the stock, which depends on the type of sale and market perception.
1. Issuance of new shares; secondary offering
Dilution
New issuance of shares results in dilution for the existing shareholders as it usually leads to a fall in the stock price. Each share represents a smaller ownership percentage hence reduced value.
Capital Raising
Through this, the company secures capital needed to finance its operation, growth, or debt reduction. This might be neutral or even positive for the stock price to the extent that investors believe this will lead to higher returns.
Market Perception
If the sale is seen by the market as a signal of financial distress, the stock could drop. On the other hand, if the move is seen as strategic for growth, then the effect could be positive.
2. Insider Selling of ARDX stock
Market Sentiment
Insider selling is taken as negative when, through such sales, investors feel that insiders are losing confidence in the company, and it ultimately depresses the price of the stock.
No Impact
Insider selling to meet personal needs, when the fundamentals of the company are strong may not impact the stock.
3. Private Placements
Strategic Investment
These shall have no impact generally on the ARDX stock price except when at a discount to the market price, which may have a low stock price in the near term. The overall effect depends upon type of sale and interpretation by investors.
Conclusion
These are the risks worth considering while looking to invest in ARDX stocks. There may be a subversion to such predictions, but being cautious is advised. Stocks have always been a volatile game, so investment must be done only after thorough research. Ensure that you take no decision in haste when it comes to purchasing stocks, even in successful companies.
FAQs
What is Ardelyx famous for?
Answer: Ardelyx has manufactured IBSRELA ™, tenapanor, an FDA-approved medicine for the treatment of irritable bowel syndrome.
What is the state of ARDX stock?
Answer: The ARDX stock is rather volatile right now due to insider sales.
Can I buy ARDX stock?
Answer: Yes, the stocks can be bought. However, researching before purchase is recommended.
