Insiders who sold Tactile Systems Technology, Inc. (NASDAQ:TCMD) earlier this year probably made the right call as market cap dropped by US$77m

By
Simply Wall St
Published
May 09, 2022
NasdaqGM:TCMD
Source: Shutterstock

By selling US$256k worth of Tactile Systems Technology, Inc. (NASDAQ:TCMD) stock at an average sell price of US$35.78 over the last year, insiders seemed to have made the most of their holdings. The company’s market cap plunged by US$77m after price dropped by 23% last week but insiders were able to limit their loss to an extent.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Tactile Systems Technology

Tactile Systems Technology Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the President, Daniel Reuvers, for US$147k worth of shares, at about US$49.75 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$13.01. So it is hard to draw any strong conclusion from it.

Insiders in Tactile Systems Technology didn't buy any shares in the last year. 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!

insider-trading-volume
NasdaqGM:TCMD Insider Trading Volume May 9th 2022

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).

Insiders at Tactile Systems Technology Have Sold Stock Recently

The last quarter saw substantial insider selling of Tactile Systems Technology shares. In total, insiders dumped US$63k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From looking at our data, insiders own US$4.3m worth of Tactile Systems Technology stock, about 1.6% of the company. We prefer to see high levels of insider ownership.

So What Does This Data Suggest About Tactile Systems Technology Insiders?

Insiders sold Tactile Systems Technology shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. When you consider that most companies have higher levels of insider ownership, we're a little wary. 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. You'd be interested to know, that we found 2 warning signs for Tactile Systems Technology and we suggest you have a look.

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, but not derivative transactions.

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