Profound Medical's Market Cap Drops To CA$227m Leaving Insiders With Losses
Profound Medical Corp.'s market cap has fallen to CA$227 million, resulting in significant losses for insiders who invested US$1.01 million at an average price of US$7.87. The stock price has declined by 23%, reducing the value of their investment to US$766.4k. Despite this, insiders, including CEO Arun Menawat, have made recent purchases, indicating confidence in the company's future. Insiders own 8.1% of the company, valued at CA$18 million, suggesting alignment with shareholders. However, the company is facing losses and has warning signs that potential investors should consider.
Insiders who acquired US$1.01m worth of Profound Medical Corp.'s (TSE:PRN) stock at an average price of US$7.87 in the past 12 months may be dismayed by the recent 23% price decline. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$766.4k which is not ideal.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
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The Last 12 Months Of Insider Transactions At Profound Medical
The Chairman of the Board & CEO Arun Menawat made the biggest insider purchase in the last 12 months. That single transaction was for CA$212k worth of shares at a price of CA$10.62 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$5.96). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Profound Medical insiders may have bought shares in the last year, but they didn't sell any. They paid about CA$7.87 on average. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
See our latest analysis for Profound Medical
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Profound Medical Insiders Bought Stock Recently
There was some insider buying at Profound Medical over the last quarter. Independent Director Arthur L. Rosenthal purchased CA$51k worth of shares in that period. We like it when there are only buyers, and no sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.
Insider Ownership Of Profound Medical
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. It appears that Profound Medical insiders own 8.1% of the company, worth about CA$18m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Profound Medical Insiders?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Profound Medical we think they are probably pretty confident of a bright future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 4 warning signs for Profound Medical (of which 2 don't sit too well with us!) you should know about.
But note: Profound Medical 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.
