Insiders Could Have Profited By Holding onto Inari Medical Shares Despite 20% Drop

Inari Medical, Inc.'s (NASDAQ:NARI) value has fallen 20% in the last week, but insiders who sold US$18m worth of stock over the last year have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of US$66.72 is still lower than the current share price.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Inari Medical

The Last 12 Months Of Insider Transactions At Inari Medical

The Director, William Hoffman, made the biggest insider sale in the last 12 months. That single transaction was for US$5.7m worth of shares at a price of US$70.87 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$45.40. So it may not shed much light on insider confidence at current levels.

Over the last year we saw more insider selling of Inari Medical shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. 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 Inari Medical

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Inari Medical insiders own 9.6% of the company, currently worth about US$253m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Inari Medical Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Inari Medical insiders selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Inari Medical and understanding this should be part of your investment process.

Of course Inari Medical may not be the best stock to buy. So you may wish to see this free collection of high quality 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.