Oncology Institute Gains 17%, Insider Trades Reap Benefit

Insiders who bought The Oncology Institute, Inc. (NASDAQ:TOI) stock in the last 12 months were richly rewarded last week. The company's market value increased by US$33m as a result of the stock's 17% gain over the same period. In other words, the original US$281.1k purchase is now worth US$1.56m.

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.

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The Last 12 Months Of Insider Transactions At Oncology Institute

The Independent Director Mark Pacala made the biggest insider purchase in the last 12 months. That single transaction was for US$94k worth of shares at a price of US$1.04 each. We do like to see buying, but this purchase was made at well below the current price of US$2.99. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months Oncology Institute insiders were buying shares, but not selling. Their average price was about US$0.54. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for Oncology Institute

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insiders At Oncology Institute Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Oncology Institute. In total, insiders bought US$231k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Oncology Institute insiders own 15% of the company, worth about US$33m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Oncology Institute Tell Us?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Oncology Institute we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Oncology Institute. Be aware that Oncology Institute is showing 2 warning signs in our investment analysis, and 1 of those is a bit concerning...

But note: Oncology Institute 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 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.