NanoString Technologies Up 15%, Insiders Still Down After US$5.3m Purchase

Some of the losses seen by insiders who purchased US$5.3m worth of NanoString Technologies, Inc. (NASDAQ:NSTG) shares over the past year were recovered after the stock increased by 15% over the past week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$771k.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for NanoString Technologies

NanoString Technologies Insider Transactions Over The Last Year

Notably, that recent purchase by Martin Wygod is the biggest insider purchase of NanoString Technologies shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of US$1.72. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months NanoString Technologies insiders were buying shares, but not selling. The average buy price was around US$2.01. This is nice to see since it implies that insiders might see value around current prices. 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!

NanoString Technologies is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders At NanoString Technologies Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at NanoString Technologies. insider Martin Wygod spent US$3.9m on stock, and there wasn't any selling. This makes one think the business has some good points.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own US$1.5m worth of NanoString Technologies stock, about 1.7% of the company. We prefer to see high levels of insider ownership.

So What Do The NanoString Technologies Insider Transactions Indicate?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that NanoString Technologies insiders are expecting a bright future. 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. For example, NanoString Technologies has 6 warning signs (and 2 which can't be ignored) we think you should know about.

Of course NanoString Technologies 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 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.