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Whilst it may not be a huge deal, we thought it was good to see that the Neuronetics, Inc. (NASDAQ:STIM) Chief Financial Officer, Stephen Furlong, recently bought US$50k worth of stock, for US$2.00 per share. Even though that isn't a massive buy, it did increase their holding by 58%, which is a arguably a good sign.
The Last 12 Months Of Insider Transactions At Neuronetics
In the last twelve months, the biggest single purchase by an insider was when Independent Chairman Brian Farley bought US$134k worth of shares at a price of US$4.60 per share. That means that even when the share price was higher than US$2.18 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Over the last year, we can see that insiders have bought 107.46k shares worth US$403k. But insiders sold 12280 shares worth US$182k. Overall, Neuronetics insiders were net buyers last year. The average buy price was around US$3.75. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Neuronetics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Our data suggests Neuronetics insiders own 3.3% of the company, worth about US$1.4m. We prefer to see high levels of insider ownership.
So What Does This Data Suggest About Neuronetics Insiders?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Neuronetics insiders are reasonably well aligned, and optimistic for the future. 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. Our analysis shows 4 warning signs for Neuronetics (1 is concerning!) and we strongly recommend you look at these before investing.
But note: Neuronetics 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.
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.
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.
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