A number of insiders bought Pro-Dex, Inc. (NASDAQ:PDEX) stock last year, which is great news for shareholders
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Pro-Dex, Inc.'s (NASDAQ:PDEX) instance, it's good news for shareholders.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Pro-Dex
Pro-Dex Insider Transactions Over The Last Year
In fact, the recent purchase by Independent Director Katrina Philp was not their only acquisition of Pro-Dex shares this year. They previously made an even bigger purchase of US$98k worth of shares at a price of US$24.41 per share. That means that an insider was happy to buy shares at above the current price of US$15.12. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Happily, we note that in the last year insiders paid US$197k for 9.90k shares. But insiders sold 978.00 shares worth US$33k. In total, Pro-Dex insiders bought more than they sold over the last year. Their average price was about US$19.93. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Pro-Dex is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Pro-Dex Have Bought Stock Recently
Over the last quarter, Pro-Dex insiders have spent a meaningful amount on shares. Specifically, Independent Director Katrina Philp bought US$58k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Our data indicates that Pro-Dex insiders own about US$3.1m worth of shares (which is 5.6% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Do The Pro-Dex Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Pro-Dex stock. While we like knowing 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. Every company has risks, and we've spotted 4 warning signs for Pro-Dex you should know about.
Of course Pro-Dex may not be the best stock to buy. So you may wish to see this free collection of high quality 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, but not derivative transactions.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
