Have Neuronetics Insiders Been Selling Stock?

Anyone interested in Neuronetics, Inc. (NASDAQ:STIM) should probably be aware that the President, Keith Sullivan, recently divested US$229k worth of shares in the company, at an average price of US$4.55 each. However, the silver lining is that the sale only reduced their total holding by 5.1%, so we're hesitant to read anything much into it, on its own.

View our latest analysis for Neuronetics

Neuronetics Insider Transactions Over The Last Year

Notably, that recent sale by Keith Sullivan is the biggest insider sale of Neuronetics shares that we've seen in the last year. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$4.13. So it may not shed much light on insider confidence at current levels.

Over the last year, we can see that insiders have bought 359.17k shares worth US$363k. But they sold 292.25k shares for US$989k. In total, Neuronetics insiders sold more than they bought over the last year. They sold for an average price of about US$3.38. It's not too encouraging to see that insiders have sold at below the current price. But we wouldn't put too much weight on the insider selling. 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!

I will like Neuronetics better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

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. Neuronetics insiders own about US$18m worth of shares. That equates to 7.7% 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 Neuronetics Tell Us?

Insiders sold Neuronetics shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! 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. For example, Neuronetics has 4 warning signs (and 2 which are potentially serious) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.