Stock Analysis

This Insider Has Just Sold Shares In Insulet Corporation (NASDAQ:PODD)

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NasdaqGS:PODD
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We'd be surprised if Insulet Corporation (NASDAQ:PODD) shareholders haven't noticed that an insider, David Lemoine, recently sold US$251k worth of stock at US$251 per share. That sale was 14% of their holding, so it does make us raise an eyebrow.

Check out our latest analysis for Insulet

Insulet Insider Transactions Over The Last Year

The Executive VP & Chief Commercial Officer, Bret Christensen, made the biggest insider sale in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$202 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$265. 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. It is worth noting that this sale was only 39% of Bret Christensen's holding.

In the last year Insulet insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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NasdaqGS:PODD Insider Trading Volume November 23rd 2020

I will like Insulet better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership of Insulet

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insulet insiders own about US$155m worth of shares (which is 0.9% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Insulet Insider Transactions Indicate?

Insiders sold Insulet shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But since Insulet is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. Our analysis shows 3 warning signs for Insulet (1 doesn't sit too well with us!) and we strongly recommend you look at these before investing.

But note: Insulet 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, but not derivative transactions.

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