As Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC) gains 11%, insiders who bought last year may be wishing they had bet higher

Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 11%, resulting in a US$16m rise in the company's market capitalisation. As a result, the stock they originally bought for US$139k is now worth US$173k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Tabula Rasa HealthCare

The Last 12 Months Of Insider Transactions At Tabula Rasa HealthCare

Over the last year, we can see that the biggest insider purchase was by Independent Chair Michael Purcell for US$58k worth of shares, at about US$5.84 per share. Even though the purchase was made at a significantly lower price than the recent price (US$6.51), we still think insider buying is a positive. 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 insiders purchased 26.50k shares for US$139k. But insiders sold 10.00k shares worth US$43k. Overall, Tabula Rasa HealthCare insiders were net buyers during the last year. The average buy price was around US$5.25. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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

Are Tabula Rasa HealthCare Insiders Buying Or Selling?

There was some insider buying at Tabula Rasa HealthCare over the last quarter. Chief Financial Officer Thomas Cancro bought US$50k worth in that time. But Independent Chair Michael Purcell sold US$43k worth. While it's good to see the insider buying, the net amount bought isn't enough for us to gain much confidence from it.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Tabula Rasa HealthCare insiders own about US$17m worth of shares. That equates to 10% 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 Tabula Rasa HealthCare Tell Us?

Our data shows a little insider buying, but no selling, in the last three months. That said, the purchases were not large. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Tabula Rasa HealthCare insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for Tabula Rasa HealthCare (of which 1 is significant!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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. 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.