Peter Kamin of Psychemedics Corporation (NASDAQ:PMD) Just Spent US$112k On Shares

Investors who take an interest in Psychemedics Corporation (NASDAQ:PMD) should definitely note that insider Peter Kamin recently paid US$6.80 per share to buy US$112k worth of the stock. While that's a very decent purchase to our minds, it was proportionally a bit modest, boosting their holding by just 3.2%.

See our latest analysis for Psychemedics

The Last 12 Months Of Insider Transactions At Psychemedics

Notably, that recent purchase by insider Peter Kamin was not the only time they bought Psychemedics shares this year. They previously made an even bigger purchase of US$728k worth of shares at a price of US$6.84 per share. That implies that an insider found the current price of US$6.90 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider bought shares at close to current prices. The only individual insider to buy over the last year was Peter Kamin.

Peter Kamin bought 190.91k shares over the last 12 months at an average price of US$6.85. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

Psychemedics is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership of Psychemedics

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Psychemedics insiders own 19% of the company, worth about US$7.2m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Psychemedics Insiders?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Psychemedics we think they are probably pretty confident of a bright future. While we like knowing 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. Be aware that Psychemedics is showing 3 warning signs in our investment analysis, and 2 of those shouldn't be ignored...

But note: Psychemedics 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, but not derivative transactions.

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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.