It is boxer dogs and seizuresnot uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell
Surmodics, Inc.
(
NASDAQ:SRDX
), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
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 it is perfectly logical to keep tabs on what insiders are doing. 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’.
See our latest analysis for Surmodics
The Last 12 Months Of Insider Transactions At Surmodics
Chairman of the Board Susan Knight made the biggest insider sale in the last 12 months. That single transaction was for US$438k worth of shares at a price of US$72.93 each. That is hardly a positive sign, even though it took place above the latest price (US$47.62). So it may not shed much light on insider confidence at current levels.
In the last twelve months insiders netted US$782k for 13.00k shares sold. In total, Surmodics insiders sold more than they bought over the last year. The average sell price was around US$60.15. It’s not particularly great to see insiders were selling shares around current prices (shares recently traded around US$47.62). While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. The chart below shows insider transactions over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
NasdaqGS:SRDX Insider Trading January 2nd 19
I will like Surmodics 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 Surmodics Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Surmodics insiders own about US$21m worth of shares (which is 3.3% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
Story continues
So What Do The Surmodics Insider Transactions Indicate?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. Our analysis of Surmodics insider transactions leaves us cautious. But it’s good to see that insiders own shares in the company. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this
free
report showing analyst forecasts for its future
.
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
.
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