We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Utah Medical Products, Inc. (NASDAQ:UTMD), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Colombia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Utah Medical Products Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Chairman Kevin Cornwell for US$865k worth of shares, at about US$108 per share. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of US$74.64. So it is hard to draw any strong conclusion from it.
We note that in the last year insiders divested 52.18k shares for a total of US$5.2m. In total, Utah Medical Products insiders sold more than they bought over the last year. The sellers received a price of around US$99.96, on average. It is certainly not great to see that insiders have sold shares in the company. But we note that the selling, on average, was at well above the recently traded price of US$74.64. You can see a visual depiction of insider transactions over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Utah Medical Products better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Utah Medical Products Insiders Are Selling The Stock
The last three months saw significant insider selling at Utah Medical Products. In total, Director Barbara Payne dumped US$103k 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.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Utah Medical Products insiders own 7.4% of the company, currently worth about US$21m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Utah Medical Products Tell Us?
An insider hasn’t bought Utah Medical Products stock in the last three months, but there was some selling. And even if we look to the last year, we didn’t see any purchases. While insiders do own shares, they don’t own a heap, and they have been selling. We’re in no rush to buy! I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.