Insiders have access to real-time information on their companies and often also have an experience that can help them evaluate their firms’ investment prospects. If they are buying company stock, it’s generally worth taking a closer look.
In this report, we are going to highlight an interesting insider purchase at Outset Medical (OM:US). Outset Medical is a medical technology company that offers a FDA-cleared mobile integrated hemodialysis solution called Tablo. This is designed to improve the dialysis experience for patients and simplify things for healthcare providers. The company is listed on the Nasdaq and currently has a market cap of approximately $970.98 million.
Insider Buying at Outset Medical
Our data shows that on November 22, board member Jim Hinrichs purchased 7,500 OM shares at a price of $17.84 per share. This trade cost the insider around $134,000 and increased his holding to 47,668 shares.
Mr. Hinrichs has considerable experience in the healthcare industry. Currently, he serves as a director of Orthofix Inc., Integer Holdings, Acutus Medical, and Signifier Medical. Previously, he served as CFO at gene-editing company Cibus, CFO at diagnostic company Alere Inc, and CFO at medical technology company CareFusion Corporation. He also served in various top-level roles at Cardinal Health. Given his background, he is likely to have a good understanding of Outset Medical’s prospects.
It’s worth noting that Mr. Hinrichs is also an inactive Chartered Financial Analyst (CFA). This means he has substantial investment knowledge.
Outset Medical recently posted a good set of Q3 results.
For the period, the group generated revenue of $27.8 million, up 5.5% year on year and ahead of the consensus forecast of $25.2 million. Meanwhile, gross profit came in at $4.3 million versus $2.9 million a year earlier (gross margin was 15.6% versus 11.2% in Q3 2021).
On the back of these results, the group raised its full-year 2022 guidance. It now expects revenue of $111 million to $113 million, representing growth of 8% to 10% over 2021, versus earlier guidance of $105 million to $110 million.
During the quarter, Outset Medical resumed shipments to new home patients, and grew the Tablo home patient base beyond initial expectations. It was also awarded a five-year contract by the Department of Veterans Affairs, enabling Tablo to be sold into 106 VA hospitals across the US.
In light of these results, we see the insider buying here as a bullish indicator.