IDEXX Laboratories Insiders Sell US$2.4m Of Stock, Possibly Signalling Caution

Many IDEXX Laboratories, Inc. (NASDAQ:IDXX) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At IDEXX Laboratories

The Independent Director, M. Szostak, made the biggest insider sale in the last 12 months. That single transaction was for US$1.4m worth of shares at a price of US$466 each. That means that even when the share price was below the current price of US$546, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 49% of M. Szostak's stake.

IDEXX Laboratories insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for IDEXX Laboratories

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IDEXX Laboratories Insiders Are Selling The Stock

The last three months saw significant insider selling at IDEXX Laboratories. Specifically, Independent Director M. Szostak ditched US$646k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of IDEXX Laboratories

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It's great to see that IDEXX Laboratories insiders own 1.0% of the company, worth about US$435m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The IDEXX Laboratories Insider Transactions Indicate?

An insider sold IDEXX Laboratories shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But since IDEXX Laboratories is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example - IDEXX Laboratories has 1 warning sign we think you should be aware of.

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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.