We recently compiled a list of the 10 Large-Cap Stocks Insiders Are Selling Recently. In this article, we are going to take a look at where Tempus AI, Inc. (NASDAQ:TEM) stands against the other large-cap stocks. We previously covered 10 Large-Cap Stocks Insiders Are Buying Recently.
Why should investors track insider moves? Is it a bad sign for the company when insiders sell their shares? Not necessarily; just like insider buying activity doesn’t always mean the stock is heading for growth. Both insider selling and buying can be driven by various motives, it’s important to consider these moves within the broader context of the company’s fundamentals, industry trends, and overall market conditions.
However, insiders or people in high positions within a company—such as executives and directors, often have precious insights into the company’s strategy, plans, next moves and initiatives. Sometimes, for example, when a CEO or CFO invests their own money to acquire company shares, it can signal strong confidence in the company’s potential.
Similarly, when insiders are selling their shares, it can sometimes mean that the management is losing confidence. On the other hand, it also happens that large shareholders just want to trim their holdings to more appropriate position sizes based on the risk/reward. Insiders can also decide to sell their shares due to personal financial reasons that have nothing to do with the company.
This means that both insider selling and buying can be driven by various motives, and therefore, any insider trading activity should be carefully analyzed only with other factors. That’s why due diligence before any investment is of the utmost importance. However, insider trading activity in combination with other relevant determinants can offer valuable insights into a company’s capabilities, helping investors make more informed investment decisions.
To identify the 10 large-cap stocks insiders are selling recently, we considered only stocks with a market capitalization of more than $10 billion. We first used Insider Monkey’s insider trading stock screener and looked for stocks with at least two insiders selling over the last two months.
With each stock we note the number of recent insider sales and the company’s current market capitalization. But why is it important to follow insider activity? Our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds, focusing on insider trading and stock picks from hedge fund investor newsletters and conferences. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here)
A computer screen showcasing Artificial Intelligence and Machine Learning algorithms at work.
Tempus AI, Inc. (NASDAQ:TEM)
Number of Insiders Selling: 11
Market Capitalization: $10.857B
Tempus AI is a health technology company founded in 2015. The company is focused on integrating artificial intelligence and machine learning to advance precision medicine. Tempus AI is behind one of the world’s largest libraries of clinical and molecular data and an operating system that makes that data accessible and useful.
Over the last 12 months, 11 insiders sold some of their Tempus AI shares. Collectively, insiders among which are the company’s CEO and CFO sold a total of around $278.71 million worth of shares at an average price of $43.65 per share. Since the beginning of the year, Tempus shares went up 112.06%, and are now trading at $71.60 per share.
In February, the company announced it has completed its acquisition of Ambry Genetics, a recognized leader in genetic testing that aims to improve health by understanding the relationship between genetics and disease. Tempus AI paid $375 million in cash and $225 million in shares at closing, of which $100 million is subject to a lock-up agreement until one year post-transaction close.
For the full year 2024, the company reported revenue of $693 million, representing approximately 30% growth year-over-year.
As per 11 analysts, the average rating for Tempus AI is “Buy,” and the 12-month stock price target is $50.6, which is a decrease of 16.23% from the latest price.
Since the company went public in June 2024, its shares gained 80.22%.
Overall TEM ranks 2nd on our list of the large-cap stocks insiders are selling recently. While we acknowledge the potential of TEM as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TEM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
