Insider Activity Casts a Cloud Over Arrowhead Pharmaceuticals, Inc. (ARWR)

Despite closing 1.22 points higher on 07 November, Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) remains a key investment for many, but the stock is also a popular trading vehicle. Here’s how to trade it using charts and trading levels Thursday. The shares accumulated 8.25 percent at $16.01 with a heavy trade volume of 2.726 million shares. After opening the session at $15, the shares went as high as $16.07 and as low as $14.94, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $1.38 billion and now has 86.38 million shares outstanding. Arrowhead Pharmaceuticals, Inc. (ARWR) stock has gained 16.35 percent of market value in 21 trading days.

ARWR stock has a trailing 3-year beta of 2.03, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$0.68 a share in the trailing twelve months. The stock’s value has surged 335.05 percent year to date (YTD) against a rise of 348.46 percent in 12 month’s time. The company’s shares still trade -28.49 percent away from its 1-year high of $22.39 and 431.89 percent up from 52-week low of $3.01. The average consensus rating on the company is 1.7, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Arrowhead Pharmaceuticals, Inc. (ARWR) will probably climb 45.53 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $31-month high price target. This represents a whopping 93.63 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $24.5, which represents a return potential of 53.03 percent when compared to the closing price of the stock of $16.01 on Wednesday, November 07. The lowest price target for the stock is $19 — slightly more than 18.68 percent from ARWR’s current share price.

History has shown that shares in Arrowhead Pharmaceuticals, Inc. have gone down on 17 different earnings reaction days and are predicted to add 0.04 percent when the company reports upcoming earnings. Investors will get their next glimpse of ARWR’s Q4 earnings on December 01. Analysts are forecasting revenue to suffer decline of -8.2 percent to $8M in the fiscal fourth quarter, while earnings are seen soaring by nearly -26.67 percent to -$0.11 per share. It earned -$0.18 per share, in line with the -$0.18, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $730000, better than the $690000 analysts expected. Earnings are estimated to increase by 65.2 percent this year, 19 percent next year and continue to increase by 7.33 percent annually for the next 5 years.

Let’s take a look at some insider activity at Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) and see the pattern. The earliest insider trade took place on 10/19/2018. Leone Peter Brian parted with a total of 131.14 thousand shares of company at average share price of $13.49. The total for the sales was set at $1.77 million. After this transaction, the VP, Strategic Bus. Initiatives account balance stood at 130 thousand shares. The stock grew 18.68 percent since that insider sale. On 09/06/2018, Myszkowski Kenneth Allen, CFO, sold 45 thousand shares at a price per share of $19.34. This removed 870.3 thousand shares from the insider’s fortune and the stock saw a -17.22 percent retreat in value since the news became public. This transaction left 310.82 thousand shares in the CFO account.

On 09/04/2018, CEO Anzalone Christopher Richard performed a sale transaction worth $2.38 million. This sale at $14.45 each has eliminated 164.83 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded 10.8 percent increase since the transaction was reported. The insider now is left with 1.8 million shares remaining in the account. Myszkowski Kenneth Allen, who performs the CFO job, sold 20 thousand shares for $280.2 thousand. The disposal occurred on 06/19/2018 was priced at $14.01 per share. The share price soared 14.28 percent since the reporting date. Myszkowski Kenneth Allen now left with a stake of 310.82 thousand ARWR stock worth $4.98 million after the insider selling.

The stock is currently hovering around the first support level of $15.28. Below this, the next support is placed in the zone of $14.54. Till the time, the ARWR stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 60.51 on daily chart, which may remain a cause for concern. If the price breaks below $14.54 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $16.41 mark may result into a pull-back move towards $16.8 level.

Further, it is sporting a 101.69 on the Price-to-Sales ratio. Compare this with the industry average P/S of 183.1.