How Much Are Pro-Dex, Inc. (NASDAQ:PDEX) Insiders Taking Off The Table?

It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Pro-Dex, Inc. (NASDAQ:PDEX), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

See our latest analysis for Pro-Dex

Pro-Dex Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the CEO, President, Richard Van Kirk, sold US$282k worth of shares at a price of US$27.65 per share. That means that an insider was selling shares at slightly below the current price (US$39.48). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 17% of Richard Van Kirk's stake.

In the last year Pro-Dex insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders at Pro-Dex Have Sold Stock Recently

The last three months saw significant insider selling at Pro-Dex. Specifically, Independent Director William Farrell ditched US$104k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership of Pro-Dex

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that Pro-Dex insiders own about US$6.5m worth of shares (which is 4.2% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Pro-Dex Insiders?

An insider hasn't bought Pro-Dex stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, Pro-Dex makes money, and is growing profits. When you combine this with the relatively low insider ownership, we are very cautious about the stock. So we'd only buy after very careful consideration. While we like knowing 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. Case in point: We've spotted 3 warning signs for Pro-Dex you should be aware of, and 1 of them is potentially serious.

Of course Pro-Dex 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, but not derivative transactions.

When trading Pro-Dex or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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