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Even if it's not a huge purchase, we think it was good to see that Arun Menawat, the Chairman of the Board & CEO of Profound Medical Corp. (TSE:PRN) recently shelled out CA$80k to buy stock, at CA$6.62 per share. However, it only increased their shares held by 2.1%, and it wasn't a huge purchase by absolute value, either.
Profound Medical Insider Transactions Over The Last Year
In fact, the recent purchase by Chairman of the Board & CEO Arun Menawat was not their only acquisition of Profound Medical shares this year. They previously made an even bigger purchase of CA$212k worth of shares at a price of CA$10.62 per share. That means that even when the share price was higher than CA$6.63 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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.
While Profound Medical insiders bought shares during the last year, they didn't sell. The average buy price was around CA$8.28. These transactions suggest that insiders have considered the current price attractive. 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!
View our latest analysis for Profound Medical
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.
Does Profound Medical Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Profound Medical insiders own 7.9% of the company, worth about CA$16m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Profound Medical Insider Transactions Indicate?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Profound Medical shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 2 warning signs for Profound Medical you should know about.