What happened

Shares of Merit Medical Systems (NASDAQ:MMSI), a manufacturer of disposable medical devices, fell as much as 17% in early morning trading on Tuesday. The stock was down about 9% as of 11:05 a.m. EDT.

So what

Traders are knocking down the share price in reaction to two news items.

First, Jayson Bedford, an analyst at Raymond James, downgraded the stock from outperform to market perform.

Second, a Securities and Exchange Commission (SEC) filing showed that Fred Lampropoulos -- Merit's CEO -- sold about $5 million worth of stock on Sept. 6 at just over $30 per share.

Wall Street is taking down the share price again in response to the news.

ARrow pointing up and down with question mark

Image source: Getty Images.

Now what

This has been a brutal year for Merit shareholders. The stock is down by 50% since January, with most of those losses coming in just the last few months.

I normally don't place too much emphasis on insider selling, but I must admit that the CEO's recent sales do have me scratching my head. Shares are currently trading at a 52-week low and Lampropoulos recently reaffirmed that the company is not changing its 2020 forecast. Why is he choosing to unload some of his stock today if he believes that the company is just going through a temporary rough patch?

The good news for investors is that he still holds more than 1 million shares of Merit Medical, so he has plenty of incentive to get the share price moving in the right direction again.

Merit's stock has fallen so much that it could be view as an attractive value investment today. But it's hard for me to get excited about owning a business that is in free fall and recently lowered its full-year guidance, so I'm content to watch this story play out from the sidelines. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.