We wouldn't blame Insulet Corporation (NASDAQ:PODD) shareholders if they were a little worried about the fact that Eric Benjamin, the Executive VP recently netted about US$1.2m selling shares at an average price of US$268. That sale reduced their total holding by 26% which is hardly insignificant, but far from the worst we've seen.
The Last 12 Months Of Insider Transactions At Insulet
Over the last year, we can see that the biggest insider sale was by the Independent Chairman, Timothy Scannell, for US$1.3m worth of shares, at about US$191 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$257. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 17% of Timothy Scannell's holding.
All up, insiders sold more shares in Insulet 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. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insulet insiders own about US$70m worth of shares. That equates to 0.4% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Insulet Insider Transactions Indicate?
Insiders sold Insulet shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Insulet makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. 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. In terms of investment risks, we've identified 2 warning signs with Insulet and understanding these should be part of your investment process.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.
