On June 13, 2023, Manmeet Soni, COO, CFO, and President of Reata Pharmaceuticals Inc, sold 82,796 shares of the company's stock. This sale comes as part of a trend of insider selling over the past year. In this article, we will take a closer look at the insider transactions, Reata Pharmaceuticals Inc's business, and the stock's valuation.
Who is Manmeet Soni?
Manmeet Soni is the Chief Operating Officer, Chief Financial Officer, and President of Reata Pharmaceuticals Inc. He has been with the company since 2019 and has extensive experience in the biopharmaceutical industry. Prior to joining Reata, Soni held various leadership positions at other pharmaceutical companies, including Alnylam Pharmaceuticals and Pharmacyclics.
Reata Pharmaceuticals Inc's Business Description
Reata Pharmaceuticals Inc is a clinical-stage biopharmaceutical company focused on identifying, developing, and commercializing small molecule drugs for the treatment of severe and life-threatening diseases. The company's primary focus is on developing drugs that target the activation of Nrf2, a transcription factor that promotes the resolution of inflammation and oxidative stress. Reata's lead product candidates, bardoxolone methyl and omaveloxolone, are in late-stage clinical development for the treatment of chronic kidney disease and Friedreich's ataxia, respectively.
Analysis of Insider Buy/Sell and Relationship with Stock Price
Over the past year, Manmeet Soni has sold a total of 109,137 shares and purchased 0 shares. The insider transaction history for Reata Pharmaceuticals Inc shows that there have been 0 insider buys in total over the past year. Meanwhile, there have been 24 insider sells over the same timeframe. This trend of insider selling may raise concerns for investors, as it could indicate that insiders believe the stock is overvalued or that they are losing confidence in the company's prospects.
Shares of Reata Pharmaceuticals Inc were trading for $102.71 apiece on the day of Manmeet Soni’s recent sell. This gives the stock a market cap of $3.84 billion.
Valuation
With a price of $102.71 and a GuruFocus Value of $12.23, Reata Pharmaceuticals Inc has a price-to-GF-Value ratio of 8.4. This means the stock is significantly overvalued based on its GF Value.
The GF Value is an intrinsic value estimate developed by GuruFocus that is calculated based on the following three factors:
- Historical multiples (price-earnings ratio, price-sales ratio, price-book ratio, and price-to-free cash flow) that the stock has traded at.
- A GuruFocus adjustment factor based on the company’s past returns and growth.
- Future estimates of business performance from Morningstar analysts.
In conclusion, the recent insider sell by Manmeet Soni, along with the overall trend of insider selling over the past year, may raise concerns for investors. Additionally, the stock's current valuation suggests that it is significantly overvalued. Investors should carefully consider these factors before making any investment decisions regarding Reata Pharmaceuticals Inc.
