OrthoPediatrics Corp. (NASDAQ:KIDS) shareholders might have a reason to worry after multiple insiders sold their shares over the last year. 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, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

OrthoPediatrics Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CFO, Principal Financial & Accounting Officer, Fred Hite, for US$190k worth of shares, at about US$43.69 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$31.08). So it may not tell us anything about how insiders feel about the current share price.

OrthoPediatrics insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

OrthoPediatrics Insiders Are Selling The Stock

The last three months saw significant insider selling at OrthoPediatrics. In total, insiders dumped US$396k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership Of OrthoPediatrics

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. OrthoPediatrics insiders own about US$22m worth of shares. That equates to 3.0% of the company. 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 OrthoPediatrics Insider Transactions Indicate?

Insiders sold OrthoPediatrics shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing OrthoPediatrics. To that end, you should learn about the 4 warning signs we've spotted with OrthoPediatrics (including 1 which shouldn't be ignored).

But note: OrthoPediatrics 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.

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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.