Market cap

Sharps Technology, Inc.’s (NASDAQ:STSS) recent market cap drop of $1.4 million means a $175,000 loss for insiders who bought this year

Insiders who purchased US$411,000 of Sharps Technology, Inc. (NASDAQ:STSS) at an average buy price of $1.78 over the past year may be disappointed with the stock’s recent 13% decline. Insiders buy in the hope that their investments will increase in value over time. However, due to recent losses, their initial investment is now only worth US$236,000, which isn’t huge.

While we don’t think shareholders should simply follow insider trading, we think it makes perfect sense to keep tabs on what insiders are doing.

Check out our latest analysis for Sharps Technology

Sharps Technology insider trading over the past year

Over the past year, we can see that the biggest insider buy was made by independent non-executive director Timothy Ruemler for US$140,000 worth of shares, at around US$1.25 per share. It is therefore clear that an insider wanted to buy, even at a price higher than the current price of the stock (ie US$1.02). Although their perspective has changed since the purchase, it at least suggests that they have confidence in the future of the company. For us, it is very important to consider the price that insiders pay for the shares. It is generally more encouraging if they paid above the current price, as this suggests that they perceived value even at higher levels.

While Sharps Technology insiders have bought shares over the past year, they haven’t sold. Their average price was around US$1.78. This is nice to see as it implies that insiders might see value around current prices. The chart below shows insider trading (by companies and individuals) over the past year. If you want to know exactly who sold, how much and when, just click on the chart below!

NasdaqCM: STSS Insider Trading Volume July 17, 2022

There are always plenty of stocks that insiders are buying. So if it suits your style you can check each stock one by one or you can take a look at this free list of companies. (Hint: insiders bought them).

Sharps Technology Insiders Recently Bought Stock

It’s good to see that Sharps Technology insiders have made notable investments in the company’s stock. In total, insiders bought US$269,000 worth of shares at that time, and we had no sales. This shows some optimism about the future of the company.

Property of Sharps Technology Insiders

I like to look at how many shares insiders own in a company, to help me get a sense of how aligned they are with insiders. We generally like to see fairly high levels of insider ownership. Sharps Technology insiders own 41% of the company, which is currently worth around US$3.8 million based on recent share price. Most shareholders would be happy to see this type of insider ownership, as it suggests that management’s incentives are well aligned with those of other shareholders.

So what does this data suggest about Sharps tech insiders?

It is certainly positive to see the recent insider buying. And an analysis of last year’s transactions also gives us confidence. However, we note that the company has not made a profit in the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest that Sharps Technology insiders are well aligned and most likely believe the stock price is too low. That’s what I like to see! So, while it is useful to know what insiders are doing in terms of buying or selling, it is also useful to know the risks that a particular company faces. You would be interested to know that we have found 4 warning signs for Sharps Technology and we suggest you take a look.

But note: Sharps Technology may not be the best stock to buy. So take a look at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.