We wouldn't blame Sotera Health Company (NASDAQ:SHC) shareholders if they were a little worried about the fact that Michael Rutz, the President of Sterigenics U.S. recently netted about US$2.8m selling shares at an average price of US$18.84. That sale reduced their total holding by 37% which is hardly insignificant, but far from the worst we've seen.

Sotera Health Insider Transactions Over The Last Year

The Executive Chairman of the Board, Michael Petras, made the biggest insider sale in the last 12 months. That single transaction was for US$12m worth of shares at a price of US$16.45 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$18.89. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 13% of Michael Petras's holding.

Sotera Health insiders didn't buy any shares 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!

I will like Sotera Health better if I see some big insider buys.

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. Sotera Health insiders own 2.4% of the company, currently worth about US$131m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Sotera Health Tell Us?

An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But since Sotera Health is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Sotera Health.

But note: Sotera Health 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.

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.