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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Cutera, Inc. (NASDAQ:CUTR).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
The Last 12 Months Of Insider Transactions At Cutera
David Gollnick made the biggest insider sale in the last 12 months. That single transaction was for US$713k worth of shares at a price of US$41.02 each. That is hardly a positive sign, even though it took place above the latest price (US$14.00). So it is hard to draw any strong conclusion from it.
In the last twelve months insiders purchased 11.25k shares for US$404k. On the other hand they divested 29.41k shares, for US$1.2m. All up, insiders sold more shares in Cutera than they bought, over the last year. They sold for an average price of about US$40.99. We are not joyful about insider selling. But we note that the selling, on average, was at well above the recently traded price of US$14.00. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of Cutera
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From looking at our data, insiders own US$3.1m worth of Cutera stock, about 1.6% of the company. I generally like to see higher levels of ownership.
So What Does This Data Suggest About Cutera Insiders?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. Our analysis of Cutera insider transactions leaves us unenthusiastic. And usually insiders own more stock in the company, according to our data. Of course, the future is what matters most. So if you are interested in Cutera, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.