Pulmonx Insiders Forfeit On 14% Gains After Selling Stock

Despite the fact that Pulmonx Corporation (NASDAQ:LUNG) stock rose 14% last week, insiders who sold US$371k worth of stock in the previous 12 months are likely to be better off. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of US$1.84, which is higher than the current price, may have been the best decision.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Pulmonx

The CEO, President & Director, Glendon French, made the biggest insider sale in the last 12 months. That single transaction was for US$97k worth of shares at a price of US$1.43 each. That means that an insider was selling shares at around the current price of US$1.33. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

In total, Pulmonx insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Pulmonx

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Pulmonx Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Pulmonx. In total, insiders dumped US$141k 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

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that Pulmonx insiders own about US$2.9m worth of shares (which is 5.2% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Pulmonx Insider Transactions Indicate?

Insiders haven't bought Pulmonx stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. So we're not rushing to buy, to say the least. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Pulmonx has 3 warning signs and it would be unwise to ignore them.

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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.