Insiders who purchased Treace Medical Concepts, Inc. (NASDAQ:TMCI) shares in the past 12 months are unlikely to be deeply impacted by the stock's 13% decline over the past week. After taking the recent loss into consideration, the US$6.03m worth of stock they bought is now worth US$7.90m, indicating that their investment yielded a positive return.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Treace Medical Concepts Insider Transactions Over The Last Year

The CEO, Founder & Director John Treace made the biggest insider purchase in the last 12 months. That single transaction was for US$1.4m worth of shares at a price of US$4.58 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$6.33. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months Treace Medical Concepts insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Treace Medical Concepts 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 Treace Medical Concepts Have Bought Stock Recently

It's good to see that Treace Medical Concepts insiders have made notable investments in the company's shares. In total, insiders bought US$6.0m worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.

Insider Ownership

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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Treace Medical Concepts insiders own 30% of the company, worth about US$124m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Treace Medical Concepts Insiders?

It is good to see recent purchasing. 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. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Treace Medical Concepts. Looks promising! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 2 warning signs for Treace Medical Concepts (1 is a bit concerning) you should be aware of.

But note: Treace Medical Concepts 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.

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