Insiders Who Sold Sono-Tek Missed Out On 13% Stock Increase

Even though Sono-Tek Corporation (NASDAQ:SOTK) stock gained 13% last week, insiders who sold US$420k worth of stock over the past year are probably better off. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of US$5.38, which is higher than the current price, may have been the best decision.

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.

See our latest analysis for Sono-Tek

The Last 12 Months Of Insider Transactions At Sono-Tek

Over the last year, we can see that the biggest insider sale was by the insider, Robb Engle, for US$89k worth of shares, at about US$5.86 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$4.15. So it may not shed much light on insider confidence at current levels.

In the last year Sono-Tek insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) 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 Sono-Tek better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Sono-Tek Insiders Are Selling The Stock

The last three months saw some Sono-Tek insider selling. Chief Financial Officer Stephen Bagley only netted US$32k selling shares, in that period. Neither the lack of buying nor the presence of selling is heartening. But the amount sold isn't enough for us to put any weight on it.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 17% of Sono-Tek shares, worth about US$10m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Sono-Tek Insiders?

We did not see any insider buying in the last three months, but we did see selling. But the sales were small, so we're not concerned. Recent insider selling makes us a little nervous, in light of the broader picture of Sono-Tek insider transactions. But it's good to see that insiders own shares in the company. 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. Every company has risks, and we've spotted 3 warning signs for Sono-Tek (of which 2 are a bit unpleasant!) 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 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.