Insiders Who Purchased US$504.2k Of Modular Medical Stock May Not Have Expected 14% Tumble

The recent 14% drop in Modular Medical, Inc.'s (NASDAQ:MODD) stock could come as a blow to insiders who purchased US$504.2k worth of stock at an average buy price of US$1.82 over the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$160.6k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, 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 Modular Medical

The Chief Executive Officer James Besser made the biggest insider purchase in the last 12 months. That single transaction was for US$300k worth of shares at a price of US$1.92 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$0.58). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was James Besser.

James Besser purchased 277.25k shares over the year. The average price per share was US$1.82. 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!

See our latest analysis for Modular Medical

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Modular Medical

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Modular Medical insiders own about US$2.3m worth of shares (which is 6.7% of the company). We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At Modular Medical Tell Us?

It doesn't really mean much that no insider has traded Modular Medical shares in the last quarter. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Modular Medical stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 5 warning signs for Modular Medical (4 are a bit unpleasant!) that we believe deserve your full attention.

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.