Despite a 13% gain in Shoals Technologies Group, Inc.'s (NASDAQ:SHLS) stock price this week, shareholders shouldn't let up. Even though stock prices were relatively low, insiders elected to sell US$511k worth of stock in the last year, which could indicate some expected downturn.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Shoals Technologies Group
The General Counsel, Mehgan Peetz, made the biggest insider sale in the last 12 months. That single transaction was for US$180k worth of shares at a price of US$24.78 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$7.64. So it may not shed much light on insider confidence at current levels.
In the last year Shoals Technologies Group insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Shoals Technologies Group better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Shoals Technologies Group Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Shoals Technologies Group. In total, insiders dumped US$102k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Insider Ownership Of Shoals Technologies Group
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. We usually like to see fairly high levels of insider ownership. Insiders own 0.6% of Shoals Technologies Group shares, worth about US$6.7m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The Shoals Technologies Group Insider Transactions Indicate?
Insiders sold Shoals Technologies Group shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. When you consider that most companies have higher levels of insider ownership, we're a little wary. So we're not rushing to buy, to say the least. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 1 warning sign for Shoals Technologies Group that deserve your attention before buying any shares.
But note: Shoals Technologies Group 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 of direct interests only, but not derivative transactions or indirect interests.
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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.