While it's been a great week for Butterfly Network, Inc. (NYSE:BFLY) shareholders after stock gained 16%, not so much for insiders who sold stock over the past year. The return on their investment would have been much higher had they held on to their stock.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

The Last 12 Months Of Insider Transactions At Butterfly Network

Over the last year, we can see that the biggest insider purchase was by CEO, President & Chairman of the Board Joseph DeVivo for US$99k worth of shares, at about US$0.95 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$1.78. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In total, Butterfly Network insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insiders At Butterfly Network Have Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at Butterfly Network. We can see that CEO, President & Chairman of the Board Joseph DeVivo paid US$99k for shares in the company. But we did see Senior VP & CTO Andrei Stoica sell shares worth US$23k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.

Does Butterfly Network 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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Butterfly Network insiders own 21% of the company, worth about US$75m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Butterfly Network Tell Us?

The recent insider purchase is heartening. On the other hand the transaction history, over the last year, isn't so positive. We don't take much heart from transactions by Butterfly Network insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. In short they are likely aligned with shareholders. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Our analysis shows 3 warning signs for Butterfly Network (1 is a bit concerning!) and we strongly recommend you look at them before investing.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 of direct interests only, but not derivative transactions or indirect interests.

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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.