Although Sono-Tek Corporation (NASDAQ:SOTK) shares rose 13% last week, insiders who sold $420,000 worth of shares in the last year are probably better off. Holding the shares would have meant their investment would be worth less now than it was when they sold, so selling at an average price of $5.38, above the current price, may have been the best decision.

While we would never recommend that investors base their decisions solely on the behavior of company leaders, logic dictates that you should also pay attention to whether insiders are buying or selling shares.

Check out our latest analysis for Sono-Tek

The last 12 months of insider transactions at Sono-Tek

Over the last year, we found that the largest insider sale was by insider Robb Engle, who sold $89,000 worth of shares, or about $5.86 per share. While insider selling is a negative, we find it even more negative when shares are sold at a lower price. It is some comfort that this sale was made at a price well above the current share price of $4.15. So this may not shed much light on insider confidence at current levels.

In the last year, Sono-Tek insiders have not purchased any company shares. Below is a visual representation of insider transactions (by companies and individuals) over the last 12 months. By clicking on the graph below you can see the exact details of each insider transaction!

I’ll like Sono-Tek better if I see some big insider buying. While we wait, check out this free List of undervalued stocks and small cap stocks with significant recent insider buying.

Sono-Tek insiders sell shares

There has been some insider selling of Sono-Tek over the past three months. Chief Financial Officer Stephen Bagley only netted $32,000 from selling shares during that period. Neither the lack of buying nor the presence of selling is encouraging. But the amount sold is not high enough for us to give it any weight.

Insider ownership

Many investors like to check how much of a company is owned by insiders. Typically, the higher the insider ownership, the more likely it is that insiders are motivated to build the company for the long term. Insiders own 17% of Sono-Tek shares, worth about $10 million. While this is a strong but not outstanding level of insider ownership, it is enough to indicate some alignment between management and smaller shareholders.

So what does this data say about Sono-Tek insiders?

We haven’t seen any insider buying over the past three months, but we have seen selling. However, the selling has been small, so we are not concerned. The recent insider selling makes us a little nervous given the overall picture of Sono-Tek’s insider transactions. But it is good to see that insiders own shares in the company. While it is helpful to know what insiders are doing in terms of buying or selling, it is also helpful to know what risks a particular company faces. Every company has risks, and we have found 3 warning signs for Sono-Tek (2 of which are a bit unpleasant!) that you should know about.

If you would rather check out another company — one with potentially better financials — then don’t miss this free List of interesting companies with HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulator. Currently, we only consider open market transactions and private disposals of direct holdings, but not derivative transactions or indirect holdings.

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This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.