Anyone interested in HealthStream, Inc. (NASDAQ:HSTM) should probably be aware that the CFO and Senior VP of Accounting & Finance, Scott Roberts, recently divested US$306k worth of shares in the company, at an average price of US$32.26 each. The eyebrow raising move amounted to a reduction of 25% in their holding.
The Last 12 Months Of Insider Transactions At HealthStream
In the last twelve months, the biggest single sale by an insider was when the Co-Founder, Robert Frist, sold US$4.3m worth of shares at a price of US$29.50 per share. That means that an insider was selling shares at around the current price of US$28.29. While we don't usually like to see insider selling, it's more concerning if the sales take place 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.
HealthStream insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Check out our latest analysis for HealthStream
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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. I reckon it's a good sign if insiders own a significant number of shares in the company. HealthStream insiders own about US$245m worth of shares (which is 28% 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 HealthStream Insiders?
Insiders sold HealthStream shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But since HealthStream is profitable and growing, we're not too worried by this. 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. 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 1 warning sign for HealthStream you should be aware of.
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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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