Semler Scientific Sees Bullish Insider Buying Activity

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Large insider stock purchases at smaller companies are often worth a closer look. Smaller companies are less researched than larger organizations, meaning that they offer greater potential for outperformance. 

In this report, we are going to highlight some interesting insider buying at a small healthcare technology company, Semler Scientific Inc (SMLR:US). Semler Scientific is an American company that specializes in solutions for measuring arterial blood flow and diagnosing cardiovascular diseases. It’s listed on the Nasdaq and currently has a market cap of around $188.1 million.

Insider Buying

2iQ data shows that between September 11 and September 13, Chairman Eric Semler purchased 77,771 SMLR shares through his investment firm TCS Capital Advisors LLC. This trading activity cost the insider approximately $2.1 million.

Experienced Investor

Mr. Semler is an experienced investor. At its peak, his long/short investment fund, TCS Capital Management, was among the largest independent technology, media, and telecom investment funds worldwide.

He is also the son of Semler Scientific’s founder Herbert Semler. So, he is likely to know the company very well.

Our Insider Model sees his buying activity as very bullish.

Q2 Earnings Beat

Semler Scientific recently posted strong Q2 results that were well ahead of analysts’ forecasts.

Revenue for the quarter came in at a record $18.6 million, up 25% year on year, and above the consensus forecast of $16 million.

Meanwhile, earnings per share amounted to 75 cents versus analysts’ estimate of 56 cents.

The growth here does not seem to be reflected in the company’s valuation, however.

At present, Semler Scientific trades on a forward-looking price-to-earnings (P/E) ratio of just 12 – well below the market average.

In light of these results, and the low valuation, we see the insider buying here as a bullish development.