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Many DexCom, Inc. (NASDAQ:DXCM) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for DexCom
The Last 12 Months Of Insider Transactions At DexCom
In the last twelve months, the biggest single sale by an insider was when the Executive Chairman, Kevin Sayer, sold US$4.8m worth of shares at a price of US$106 per share. That means that even when the share price was below the current price of US$124, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 14% of Kevin Sayer's holding.
Insiders in DexCom didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders At DexCom Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at DexCom. In total, insider Girish Naganathan dumped US$254k 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 insiders think that the shares are a bargain.
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that DexCom insiders own 0.4% of the company, worth about US$200m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.