It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Profound Medical Corp.'s (TSE:PRN) case, it's fantastic news for shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Profound Medical

Profound Medical Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Chairman of the Board & CEO Arun Menawat for CA$537k worth of shares, at about CA$17.37 per share. That means that even when the share price was higher than CA$11.05 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Over the last year, we can see that insiders have bought 55.34k shares worth CA$781k. On the other hand they divested 8.69k shares, for CA$95k. Overall, Profound Medical insiders were net buyers during the last year. The average buy price was around CA$14.12. These transactions suggest that insiders have considered the current price attractive. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Profound Medical Insiders Are Selling The Stock

The last three months saw significant insider selling at Profound Medical. Specifically, Chief Commercial Officer of US Abbey Goodman ditched CA$95k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Profound Medical insiders own about CA$25m worth of shares. That equates to 9.1% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.