Investment

Insiders saw their US$1.1m investment bump up to US$1.7m after Sientra, Inc. (NASDAQ:SIEN) soared 26% last week

Sientra, Inc. (NASDAQ:SIEN) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 26%, resulting in a US$12m rise in the company’s market capitalisation. Put another way, the original US$1.1m acquisition is now worth US$1.7m.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out the opportunities and risks within the US Medical Equipment industry.

The Last 12 Months Of Insider Transactions At Sientra

Over the last year, we can see that the biggest insider purchase was by insider Norman Pessin for US$933k worth of shares, at about US$0.26 per share. Even though the purchase was made at a significantly lower price than the recent price (US$0.32), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn’t tell us much about how insiders feel about the current share price.

Sientra insiders may have bought shares in the last year, but they didn’t sell any. Their average price was about US$0.22. We don’t deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today’s levels. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NasdaqGS:SIEN Insider Trading Volume November 19th 2022

Sientra is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Sientra Insiders Bought Stock Recently

It’s good to see that Sientra insiders have made notable investments in the company’s shares. In total, insiders bought US$1.1m worth of shares in that time, and we didn’t record any sales whatsoever. That shows some optimism about the company’s future.

Insider Ownership Of Sientra

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Our data indicates that Sientra insiders own about US$2.1m worth of shares (which is 6.4% of the company). We do generally prefer see higher levels of insider ownership.

So What Do The Sientra Insider Transactions Indicate?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. While the overall levels of insider ownership are below what we’d like to see, the history of transactions imply that Sientra insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Sientra. When we did our research, we found 6 warning signs for Sientra (4 are concerning!) that we believe deserve your full attention.

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, but not derivative transactions.

Valuation is complex, but we’re helping make it simple.

Find out whether Sientra is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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.

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