Keeping tabs on insider trading behavior represents a crucial part of some investors’ security analysis process. After all, past research shows that corporate insiders make more profit-generating trades than the average investor, which clearly represents one of the main reasons retail investors and even hedge fund managers have been keeping track of insider trading metrics for years.
However, any individual tracking insider trading activity should be aware that insider selling does not necessarily represent a bearish or negative signal. Insider selling should be interpreted with high caution regardless of the size of each sale. At the end of the day, corporate insiders may cash out their holdings for a wide range of reasons, which could include cash needs, tax payments or other reasons unlinked to their companies’ current fundamentals or future prospects. Investors believing in the information power of insider trading metrics should not act or trade on each detected inside sale instantly; investors should conduct a more in-depth analysis of the companies witnessing insider selling to find out whether the insider selling is indeed cause for concern. Having said that, the following article will lay out a list of noteworthy insider transactions reported with the SEC this Wednesday.
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Interim CEO of Battered Surgical Device Company Buys $4 Million Worth of Shares
Let’s begin our discussion by having a look at a voluminous insider purchase observed at Misonix Inc. (NASDAQ:MSON). Stavros George Vizirgianakis, Interim Chief Executive Officer and Interim President since early September 2016, snatched up 761,469 shares Tuesday at a price tag of $5.25 each. Following the $4 million-purchase, Mr. Vizirgianakis currently holds an ownership stake of 1.21 million shares.
This insider purchase was so huge that Misonix Inc. (NASDAQ:MSON) released a public statement regarding the transaction. As the Interim CEO said in the statement, “this investment indicates my belief that the future for Misonix is bright.” Misonix operates as a surgical device company that designs, manufactures, and markets therapeutic ultrasonic products for spine surgery, skull-based surgery, neurosurgery, wound and burn debridement, cosmetic surgery, laparoscopic surgery and other surgical applications. In mid-September, the company’s shares took a hit after the company announced that the filing of its Annual Report on Form 10-K for the fiscal year that ended June 30 would be delayed due to an ongoing investigation by the company’s Audit Committee related to deficiencies in its internal control. The medical device maker voluntarily told U.S. authorities about potential U.S. foreign-bribery violations by the company that distributes its products in China. The company’s shares have lost 37% of their value since the start of the year. Jim Simons’ Renaissance Technologies LLC was the owner of 171,000 shares of Misonix Inc. (NASDAQ:MSON) at the end of the second quarter.
The next two pages of this article will discuss several other noteworthy transactions reported with the SEC on Wednesday.