Insiders who bought Sonida Senior Living, Inc. (NYSE:SNDA) in the last 12 months may probably not pay attention to the stock's recent 15% drop. Even after accounting for the recent loss, the US$10.7m worth of stock purchased by them is now worth US$26.1m or in other words, their investment continues to give good returns.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Sonida Senior Living
Over the last year, we can see that the biggest insider purchase was by insider Shmuel Levinson for US$10m worth of shares, at about US$9.50 per share. Even though the purchase was made at a significantly lower price than the recent price (US$23.40), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Happily, we note that in the last year insiders paid US$11m for 1.12m shares. On the other hand they divested 9.19k shares, for US$259k. In the last twelve months there was more buying than selling by Sonida Senior Living insiders. 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!
Sonida Senior Living is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Sonida Senior Living Insiders Bought Stock Recently
At Sonida Senior Living,over the last quarter, we have observed quite a lot more insider buying than insider selling. In fact, three insiders bought US$687k worth of shares. But Senior VP & Chief Revenue Officer Michael Fryar sold shares worth US$259k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Does Sonida Senior Living Boast High Insider Ownership?
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. I reckon it's a good sign if insiders own a significant number of shares in the company. Sonida Senior Living insiders own about US$25m worth of shares. That equates to 7.9% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Sonida Senior Living Tell Us?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Sonida Senior Living insiders are well aligned, and that they may think the share price is too low. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 2 warning signs for Sonida Senior Living (of which 1 can't be ignored!) you should know about.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.