Neuronetics, Inc.'s (NASDAQ:STIM)) market cap declines to US$65m but insiders who sold US$1.2m stock were able to hedge their losses

Over the past year, insiders sold US$1.2m worth of Neuronetics, Inc. (NASDAQ:STIM) stock at an average price of US$8.89 per share allowing them to get the most out of their money. The company's market worth decreased by US$11m over the past week after the stock price dropped 14%, although insiders were able to minimize their losses

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Neuronetics

The Last 12 Months Of Insider Transactions At Neuronetics

Over the last year, we can see that the biggest insider sale was by the President, Keith Sullivan, for US$686k worth of shares, at about US$13.64 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$2.44. So it may not tell us anything about how insiders feel about the current share price.

In total, Neuronetics insiders sold more than they bought over the last year. They sold for an average price of about US$8.89. We are not joyful about insider selling. But the selling was at much higher prices than the current share price (US$2.44), so it probably doesn't tell us a lot about the value on offer today. 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!

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

Insiders at Neuronetics Have Sold Stock Recently

The last three months saw significant insider selling at Neuronetics. Specifically, insiders ditched US$95k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own US$1.8m worth of Neuronetics stock, about 2.7% of the company. I generally like to see higher levels of ownership.

What Might The Insider Transactions At Neuronetics Tell Us?

Insiders sold Neuronetics shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. When you combine this with the relatively low insider ownership, we are very cautious about the stock. So we're not rushing to buy, to say the least. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Neuronetics. You'd be interested to know, that we found 5 warning signs for Neuronetics and we suggest you have a look.

Of course Neuronetics 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.

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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.