Shareholders May Not Overlook Pulmonx Insiders Selling US$670k In Stock

Even though Pulmonx Corporation (NASDAQ:LUNG) stock gained 17% last week, insiders who sold US$670k worth of stock over the past year are probably better off. Selling at an average price of US$5.57, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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Pulmonx Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CEO, President & Director, Steven Williamson, for US$198k worth of shares, at about US$7.14 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$3.09). So it is hard to draw any strong conclusion from it. Notably Steven Williamson was also the biggest buyer, having purchased US$169k worth of shares.

Happily, we note that in the last year insiders paid US$169k for 37.57k shares. But they sold 120.20k shares for US$670k. All up, insiders sold more shares in Pulmonx than they bought, over the last year. The sellers received a price of around US$5.57, on average. 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$3.09. 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!

See our latest analysis for Pulmonx

I will like Pulmonx better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Pulmonx Have Sold Stock Recently

We've seen more insider selling than insider buying at Pulmonx recently. In that time, insiders dumped US$136k worth of shares. On the other hand we note Independent Director Daniel Florin bought US$71k worth of shares. The share price has moved a bit recently, but it's hard to argue that the selling is a positive.

Insider Ownership Of Pulmonx

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, Pulmonx insiders have about 2.6% of the stock, worth approximately US$3.1m. We consider this fairly low insider ownership.

So What Does This Data Suggest About Pulmonx Insiders?

Unfortunately, there has been more insider selling of Pulmonx stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. When you consider that most companies have higher levels of insider ownership, we're a little wary. We'd certainly practice some caution before buying! 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. In terms of investment risks, we've identified 3 warning signs with Pulmonx and understanding these should be part of your investment process.

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.