Whilst it may not be a huge deal, we thought it was good to see that the Neuronetics, Inc. (NASDAQ:STIM) Independent Chairman of the Board, Robert Cascella, recently bought US$58k worth of stock, for US$0.83 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 33%.
Neuronetics Insider Transactions Over The Last Year
The President, Keith Sullivan, made the biggest insider sale in the last 12 months. That single transaction was for US$134k worth of shares at a price of US$3.23 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$1.12). So it is hard to draw any strong conclusion from it.
In the last twelve months insiders purchased 145.17k shares for US$180k. But insiders sold 251.46k shares worth US$742k. Over the last year we saw more insider selling of Neuronetics shares, than buying. The average sell price was around US$2.95. We are not joyful about insider selling. But the selling was at much higher prices than the current share price (US$1.12), so it probably doesn't tell us a lot about the value on offer today. 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!
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Does Neuronetics Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that Neuronetics insiders own about US$2.3m worth of shares (which is 6.7% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Do The Neuronetics Insider Transactions Indicate?
The recent insider purchases are heartening. However, the longer term transactions are not so encouraging. We're not thrilled with the relatively low insider ownership and the longer term transaction history. But we like the recent purchasing. 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. For example, Neuronetics has 4 warning signs (and 1 which is a bit concerning) we think you should know about.
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 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.
