The recent 21% drop in Adagio Medical Holdings, Inc.'s (NASDAQ:ADGM) stock could come as a blow to insiders who purchased US$243.9k worth of stock at an average buy price of US$1.10 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$113.6k, which is not great.

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

Adagio Medical Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when CEO & Director Todd Usen bought US$226k worth of shares at a price of US$1.09 per share. That means that an insider was happy to buy shares at above the current price of US$0.51. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months Adagio Medical Holdings insiders were buying shares, but not selling. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Does Adagio Medical Holdings Boast High 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. Based on our data, Adagio Medical Holdings insiders have about 1.4% of the stock, worth approximately US$157k. I generally like to see higher levels of ownership.

So What Does This Data Suggest About Adagio Medical Holdings Insiders?

It doesn't really mean much that no insider has traded Adagio Medical Holdings shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if Adagio Medical Holdings insiders bought more shares in the company. 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.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.