NeoGenomics' Market Cap Drops To US$954m Leaving Insiders With Losses

The recent price decline of 11% in NeoGenomics, Inc.'s (NASDAQ:NEO) stock may have disappointed insiders who bought US$585.3k worth of shares at an average price of US$7.79 in 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$525.0k.

Although we don't think shareholders should simply follow insider transactions, 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 NeoGenomics

The Chief Financial Officer Jeffrey Sherman made the biggest insider purchase in the last 12 months. That single transaction was for US$150k worth of shares at a price of US$7.51 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$6.99). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months NeoGenomics insiders were buying shares, but not selling. 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!

View our latest analysis for NeoGenomics

NeoGenomics is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

NeoGenomics Insiders Bought Stock Recently

Over the last quarter, NeoGenomics insiders have spent a meaningful amount on shares. In total, insiders bought US$585k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

Does NeoGenomics Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. NeoGenomics insiders own about US$12m worth of shares. That equates to 1.2% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At NeoGenomics Tell Us?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest NeoGenomics insiders are well aligned, and that they may think the share price is too low. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 2 warning signs for NeoGenomics that deserve your attention before buying any shares.

But note: NeoGenomics may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.