Some OSI Systems, Inc. (NASDAQ:OSIS) shareholders may be a little concerned to see that the Chairman, Deepak Chopra, recently sold a substantial US$2.3m worth of stock at a price of US$153 per share. However, that sale only accounted for 3.4% of their holding, so arguably it doesn't say much about their conviction.

OSI Systems Insider Transactions Over The Last Year

The Executive VP & CFO, Alan Edrick, made the biggest insider sale in the last 12 months. That single transaction was for US$6.3m worth of shares at a price of US$144 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$153. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 13% of Alan Edrick's stake.

OSI Systems insiders didn't buy any shares over the last year. 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!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of OSI Systems

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. OSI Systems insiders own 6.0% of the company, currently worth about US$153m 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.

So What Does This Data Suggest About OSI Systems Insiders?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But since OSI Systems is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing OSI Systems. Our analysis shows 3 warning signs for OSI Systems (2 shouldn't be ignored!) and we strongly recommend you look at these before investing.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

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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.