Some IDEXX Laboratories, Inc. (NASDAQ:IDXX) shareholders may be a little concerned to see that the Independent Director, M. Szostak, recently sold a substantial US$5.8m worth of stock at a price of US$490 per share. That diminished their holding by a very significant 54%, which arguably implies a strong desire to reallocate capital.
IDEXX Laboratories Insider Transactions Over The Last Year
The Senior Advisor & Director, Jonathan Ayers, made the biggest insider sale in the last 12 months. That single transaction was for US$15m worth of shares at a price of US$298 each. That means that even when the share price was below the current price of US$505, 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 5.5% of Jonathan Ayers's holding.
IDEXX Laboratories insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Insider Ownership of IDEXX Laboratories
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. IDEXX Laboratories insiders own 1.0% of the company, currently worth about US$431m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The IDEXX Laboratories Insider Transactions Indicate?
An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. On the plus side, IDEXX Laboratories makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that IDEXX Laboratories has 2 warning signs and it would be unwise to ignore them.
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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, but not derivative transactions.
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What are the risks and opportunities for IDEXX Laboratories?
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IDEXX Laboratories, Inc. develops, manufactures, and distributes products and services primarily for the companion animal veterinary, livestock and poultry, dairy, and water testing markets worldwide.
Adequate balance sheet with moderate growth potential.