While Tactile Systems Technology, Inc. (NASDAQ:TCMD) shareholders have had a good week with the stock up 14%, they shouldn't let their guards down. Although prices were relatively low, insiders chose to sell US$1.6m worth of stock in the past 12 months. This could be a sign of impending weakness.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

The Last 12 Months Of Insider Transactions At Tactile Systems Technology

The CEO, President & Director, Sheri Dodd, made the biggest insider sale in the last 12 months. That single transaction was for US$431k worth of shares at a price of US$28.69 each. That means that even when the share price was below the current price of US$30.28, an insider wanted to cash in some shares. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 14% of Sheri Dodd's holding.

Tactile Systems Technology insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Tactile Systems Technology Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Tactile Systems Technology. In total, Chief Financial Officer Elaine Birkemeyer sold US$113k 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

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Tactile Systems Technology insiders own about US$18m worth of shares. That equates to 2.8% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Tactile Systems Technology Insider Transactions Indicate?

An insider sold Tactile Systems Technology shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But since Tactile Systems Technology is profitable and growing, we're not too worried by this. Insiders own shares, but we're still pretty cautious, given the history of sales. 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.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.