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Investors who take an interest in Biodesix, Inc. (NASDAQ:BDSX) should definitely note that the Independent Director, Jack Schuler, recently paid US$6.51 per share to buy US$130k worth of the stock. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.
Biodesix Insider Transactions Over The Last Year
Notably, that recent purchase by Independent Director Jack Schuler was not the only time they bought Biodesix shares this year. They previously made an even bigger purchase of US$1.7m worth of shares at a price of US$7.50 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$6.29). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for 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.
While Biodesix insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Biodesix is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Biodesix
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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's great to see that Biodesix insiders own 65% of the company, worth about US$111m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Biodesix Insider Transactions Indicate?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. 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 Biodesix. That's what I like to see! While we like knowing 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. Case in point: We've spotted 4 warning signs for Biodesix you should be aware of, and 1 of them can't be ignored.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.
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.
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