While ShockWave Medical, Inc. (NASDAQ:SWAV) shareholders have enjoyed a good week with stock up 3.6%, they need remain vigilant. Although prices were relatively low, insiders chose to sell US$9.5m worth of stock in the past 12 months. This could be a sign of impending weakness.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for ShockWave Medical

ShockWave Medical Insider Transactions Over The Last Year

The Chief Commercial Officer, Isaac Zacharias, made the biggest insider sale in the last 12 months. That single transaction was for US$861k worth of shares at a price of US$222 each. So what is clear is that an insider saw fit to sell at around the current price of US$212. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

In the last year ShockWave Medical insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and 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!

I will like ShockWave Medical better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

ShockWave Medical Insiders Are Selling The Stock

The last three months saw significant insider selling at ShockWave Medical. In total, insiders sold US$1.3m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. ShockWave Medical insiders own 1.7% of the company, currently worth about US$131m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About ShockWave Medical Insiders?

Insiders sold ShockWave Medical shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing ShockWave Medical. Every company has risks, and we've spotted 3 warning signs for ShockWave Medical you should know about.

Of course ShockWave Medical 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.

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