Insiders who bought Pulse Biosciences, Inc. (NASDAQ:PLSE) stock lover the last 12 months are probably not as affected by last week's 16% loss. After accounting for the recent loss, the US$9.77m worth of shares they purchased is now worth US$13.1m, suggesting a good return on their investment.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Pulse Biosciences Insider Transactions Over The Last Year

The Executive Chairman Robert Duggan made the biggest insider purchase in the last 12 months. That single transaction was for US$2.0m worth of shares at a price of US$9.44 each. We do like to see buying, but this purchase was made at well below the current price of US$12.20. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months Pulse Biosciences insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Pulse Biosciences is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders At Pulse Biosciences Have Bought Stock Recently

It's good to see that Pulse Biosciences insiders have made notable investments in the company's shares. President Burke Barrett spent US$86k on stock, and there wasn't any selling. That shows some optimism about the company's future.

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. Pulse Biosciences insiders own 70% of the company, currently worth about US$470m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Pulse Biosciences Tell Us?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Pulse Biosciences insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Pulse Biosciences. Case in point: We've spotted 5 warning signs for Pulse Biosciences you should be aware of, and 3 of them can't be ignored.

Of course Pulse Biosciences 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com