Insiders sitting comfortably on a US$33k profit after buying Proto Labs, Inc. (NYSE:PRLB) stock worth US$642k last year

Insiders who purchased Proto Labs, Inc. (NYSE:PRLB) shares in the past 12 months are unlikely to be deeply impacted by the stock's 5.4% decline over the past week. After accounting for the recent loss, the US$642k worth of shares they purchased is now worth US$675k, suggesting a good return on their investment.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Proto Labs

Proto Labs Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Chief Technology Officer Arthur Baker bought US$492k worth of shares at a price of US$49.21 per share. So it's clear an insider wanted to buy, at around the current price, which is US$51.41. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Proto Labs insiders decided to buy shares at close to current prices.

In the last twelve months Proto Labs insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Proto Labs is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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. Our data indicates that Proto Labs insiders own about US$9.3m worth of shares (which is 0.7% of the company). Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About Proto Labs Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it'd be more encouraging if Proto Labs insiders bought more shares in the company. 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. You'd be interested to know, that we found 1 warning sign for Proto Labs and we suggest you have a look.

But note: Proto Labs 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, but not derivative transactions.

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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.