We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in IRadimed Corporation (NASDAQ:IRMD).
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
IRadimed Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Francis Casey sold US$1.6m worth of shares at a price of US$30.51 per share. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$24.38. So it may not tell us anything about how insiders feel about the current share price.
In total, IRadimed insiders sold more than they bought over the last year. The average sell price was around US$23.22. We don’t gain confidence from insider selling below the recent share price of US$24.38. Of course, the sales could be motivated for a multitude of reasons, so we shouldn’t jump to conclusions. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
IRadimed Insiders Are Selling The Stock
The last three months saw some IRadimed insider selling. Steve Nardi only netted US$37k selling shares, in that period. Neither the lack of buying nor the presence of selling is heartening. But the selling simply isn’t sufficiently substantial to be of much use as a signal.
Does IRadimed Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. 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’s great to see that IRadimed insiders own 54% of the company, worth about US$146m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At IRadimed Tell Us?
Insider selling has just outweighed insider buying in the last three months. But the difference isn’t enough to have us worried. It’s heartening that insiders own plenty of stock, but we’d like to see more insider buying, since the last year of IRadimed insider transactions don’t fill us with confidence. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for IRadimed.
But note: IRadimed may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.