OptimizeRx Insiders Enjoying US$747k Appreciation On US$2.54m Investment

OptimizeRx Corporation (NASDAQ:OPRX) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 15% resulting in a US$23m addition to the company’s market value. In other words, the original US$2.54m purchase is now worth US$3.29m.

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.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

The Last 12 Months Of Insider Transactions At OptimizeRx

Over the last year, we can see that the biggest insider purchase was by Independent Director James Lang for US$2.4m worth of shares, at about US$7.60 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$9.64. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

While OptimizeRx insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for OptimizeRx

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).

Insiders At OptimizeRx Have Bought Stock Recently

Over the last quarter, OptimizeRx insiders have spent a meaningful amount on shares. Independent Director James Lang spent US$2.4m on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.

Does OptimizeRx Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. OptimizeRx insiders own about US$25m worth of shares. That equates to 15% 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.

So What Do The OptimizeRx Insider Transactions Indicate?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Insiders likely see value in OptimizeRx shares, given these transactions (along with notable insider ownership of the company). 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. To help with this, we've discovered 2 warning signs (1 doesn't sit too well with us!) that you ought to be aware of before buying any shares in OptimizeRx.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.