Insiders who sold Vericel Corporation (NASDAQ:VCEL) earlier this year probably made the right call as market cap dropped by US$140m

By
Simply Wall St
Published
February 24, 2022
NasdaqCM:VCEL
Source: Shutterstock

By selling US$253k worth of Vericel Corporation (NASDAQ:VCEL) stock at an average sell price of US$50.52 over the last year, insiders seemed to have made the most of their holdings. The company's market valuation decreased by US$140m after the stock price dropped 8.5% over the past week, but insiders were spared from painful losses.

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.

Check out our latest analysis for Vericel

Vericel Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Paul Wotton, sold US$253k worth of shares at a price of US$50.52 per share. While insider selling is a negative, to us, it is more negative if the shares are sold 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$32.18. So it may not shed much light on insider confidence at current levels. Paul Wotton was the only individual insider to sell shares in the last twelve months.

The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NasdaqCM:VCEL Insider Trading Volume February 24th 2022

I will like Vericel better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does Vericel Boast High Insider Ownership?

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. We usually like to see fairly high levels of insider ownership. It appears that Vericel insiders own 0.7% of the company, worth about US$10m. 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 Vericel Tell Us?

The fact that there have been no Vericel insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Vericel insiders. The modest level of insider ownership is, at least, some comfort. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 2 warning signs for Vericel you should be aware of.

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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