We often see insiders buying up shares in companies that perform well over the long term. 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 ICU Medical, Inc. ( NASDAQ:ICUI ), 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 Columbia 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'.
The Last 12 Months Of Insider Transactions At ICU Medical
Over the last year, we can see that the biggest insider sale was by the , Daniel Woolson, for US$482k worth of shares, at about US$274 per share. So what is clear is that an insider saw fit to sell at around the current price of US$229. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
Over the last year, we note insiders sold 6080 shares worth US$1.6m. ICU Medical insiders didn't buy any shares over the last year. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like ICU Medical better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
ICU Medical Insiders Are Selling The Stock
The last three months saw significant insider selling at ICU Medical. Specifically, Independent Director Robert Swinney ditched US$344k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the directors think that the shares are a bargain.
Insider Ownership of ICU Medical
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. ICU Medical insiders own about US$338m worth of shares (which is 7.2% 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.
So What Does This Data Suggest About ICU Medical Insiders?
An insider hasn't bought ICU Medical stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for ICU Medical .
But note: ICU Medical may not be the best stock to buy . So take a peek at this free list of interesting companies with high ROE and low debt.
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