Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of MediWound Ltd. (NASDAQ:MDWD), it sends a favourable message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
MediWound Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Executive Independent Chairman Nachum Shamir for US$84k worth of shares, at about US$14.00 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$13.56). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. 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 insiders purchased 10.21k shares for US$143k. But they sold 6.35k shares for US$82k. In the last twelve months there was more buying than selling by MediWound insiders. 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!
Check out our latest analysis for MediWound
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insiders At MediWound Have Sold Stock Recently
There was substantially more insider selling, than buying, of MediWound shares over the last three months. In total, insiders sold US$82k worth of shares in that time. On the flip side, Independent Director Shmuel Rubinstein spent US$6.6k on purchasing shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.
Insider Ownership Of MediWound
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Based on our data, MediWound insiders have about 2.9% of the stock, worth approximately US$4.7m. However, it's possible that insiders might have an indirect interest through a more complex structure. We consider this fairly low insider ownership.
So What Do The MediWound Insider Transactions Indicate?
The insider sales have outweighed the insider buying, at MediWound, in the last three months. But we take heart from prior transactions. But we'd like it if insiders owned more stock, overall. So overall it's hard to argue insiders are bullish. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 2 warning signs with MediWound and understanding these should be part of your investment process.
Of course MediWound 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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