For Oncology Institute Insiders, Selling US$644k Of Shares Was A Smart Move

While The Oncology Institute, Inc. (NASDAQ:TOI) shareholders have had a good week with the stock up 13%, they shouldn't let their guards down. The fact that insiders chose to dispose of US$644k worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

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.

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The Last 12 Months Of Insider Transactions At Oncology Institute

In the last twelve months, the biggest single sale by an insider was when the Vice Chairman, Bradford Hively, sold US$312k worth of shares at a price of US$2.87 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$4.13. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 20% of Bradford Hively's holding.

Happily, we note that in the last year insiders paid US$231k for 221.87k shares. But they sold 192.09k shares for US$644k. In total, Oncology Institute insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Oncology Institute

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Insiders At Oncology Institute Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Oncology Institute. In total, insiders sold US$250k 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

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 8.2% of Oncology Institute shares, worth about US$32m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Oncology Institute Insider Transactions Indicate?

Insiders sold Oncology Institute shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! 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. To help with this, we've discovered 5 warning signs (2 are significant!) that you ought to be aware of before buying any shares in Oncology Institute.

But note: Oncology Institute 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.

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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.