SomnoMed Reaches AU$189m Market Cap Benefiting Insider Stock Buying

SomnoMed Limited (ASX:SOM) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 15% resulting in a AU$25m addition to the company’s market value. In other words, the original AU$294.7k purchase is now worth AU$575.2k.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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SomnoMed Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Chairman of the Board Gaetano Russo bought AU$295k worth of shares at a price of AU$0.44 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.86. 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.

The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for SomnoMed

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does SomnoMed 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. Our data indicates that SomnoMed insiders own about AU$14m worth of shares (which is 7.4% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At SomnoMed Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think SomnoMed insiders are doubting the company, and they do own shares. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for SomnoMed.

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.