Don't Ignore The Fact That This Insider Just Sold Some Shares In Sharps Compliance Corp. (NASDAQ:SMED)

We wouldn't blame Sharps Compliance Corp. (NASDAQ:SMED) shareholders if they were a little worried about the fact that Parris Holmes, the Independent Director recently netted about US$508k selling shares at an average price of US$9.23. However, that sale only accounted for 5.7% of their holding, so arguably it doesn't say much about their conviction.

See our latest analysis for Sharps Compliance

The Last 12 Months Of Insider Transactions At Sharps Compliance

In fact, the recent sale by Parris Holmes was the biggest sale of Sharps Compliance shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of US$9.55, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 5.7%of Parris Holmes's holding.

Insiders in Sharps Compliance didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Sharps Compliance

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Sharps Compliance insiders own 22% of the company, worth about US$35m. 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 Does This Data Suggest About Sharps Compliance Insiders?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But it is good to see that Sharps Compliance is growing earnings. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Sharps Compliance. While conducting our analysis, we found that Sharps Compliance has 3 warning signs and it would be unwise to ignore these.

But note: Sharps Compliance 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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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.
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