Hudson Technologies Stock Falls 13%, Insider Sellers Avert Losses – Simply Wall St
Stock Analysis
Even though Hudson Technologies, Inc. (NASDAQ:HDSN) has fallen by 13% over the past week , insiders who sold US$3.0m worth of stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of US$7.77 is still below the current share price.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Hudson Technologies
The Director, Stephen Mandracchia, made the biggest insider sale in the last 12 months. That single transaction was for US$1.5m worth of shares at a price of US$9.73 each. That means that even when the share price was below the current price of US$10.09, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 23% of Stephen Mandracchia's holding.
Insiders in Hudson Technologies didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Over the last three months, we've seen significant insider selling at Hudson Technologies. In total, Vice President of Operations Kenneth Gaglione dumped US$219k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. Hudson Technologies insiders own about US$65m worth of shares. That equates to 14% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
An insider hasn't bought Hudson Technologies stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. On the plus side, Hudson Technologies makes money, and is growing profits. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! 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 Hudson Technologies is showing 4 warning signs in our investment analysis, and 2 of those are potentially serious…
But note: Hudson Technologies 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.
Find out whether Hudson Technologies 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.
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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.
Hudson Technologies, Inc. a refrigerant services company, provides solutions to recurring problems within the refrigeration industry primarily in the United States.
The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.
Read more about these checks in the individual report sections or in our analysis model.
Very undervalued with solid track record.
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