We wouldn't blame UFP Technologies, Inc. (NASDAQ:UFPT) shareholders if they were a little worried about the fact that R. Bailly, the CEO & Chairman recently netted about US$5.7m selling shares at an average price of US$209. However, that sale only accounted for 9.5% of their holding, so arguably it doesn't say much about their conviction.

The Last 12 Months Of Insider Transactions At UFP Technologies

In fact, the recent sale by R. Bailly was the biggest sale of UFP Technologies shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of US$217, 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 9.5% of R. Bailly's stake.

In total, UFP Technologies insiders sold more than they bought 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!

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

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 5.3% of UFP Technologies shares, worth about US$88m. 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 Does This Data Suggest About UFP Technologies Insiders?

Insiders haven't bought UFP Technologies stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, UFP Technologies makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing UFP Technologies. In terms of investment risks, we've identified 1 warning sign with UFP Technologies and understanding it should be part of your investment process.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.