In the last year, many Grocery Outlet Holding Corp. (NASDAQ:GO) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Grocery Outlet Holding Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Lead Independent Director Erik Ragatz for US$2.1m worth of shares, at about US$20.91 per share. That implies that an insider found the current price of US$21.22 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Grocery Outlet Holding insiders decided to buy shares at close to current prices.
Over the last year, we can see that insiders have bought 146.50k shares worth US$3.3m. But insiders sold 169.06k shares worth US$4.5m. All up, insiders sold more shares in Grocery Outlet Holding than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Grocery Outlet Holding 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.
Grocery Outlet Holding Insiders Bought Stock Recently
At Grocery Outlet Holding,over the last quarter, we have observed quite a lot more insider buying than insider selling. In total, two insiders bought US$2.3m worth of shares in that time. But Executive VP Luke Thompson sold shares worth US$30k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
Insider Ownership Of Grocery Outlet Holding
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Grocery Outlet Holding insiders own about US$79m worth of shares. That equates to 3.8% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Grocery Outlet Holding Tell Us?
It's certainly positive to see the recent insider purchases. On the other hand the transaction history, over the last year, isn't so positive. While recent transactions indicate confidence in Grocery Outlet Holding, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. So they seem pretty well aligned, overall. Of course, the future is what matters most. So if you are interested in Grocery Outlet Holding, you should check out this free report on analyst forecasts for the company.
But note: Grocery Outlet Holding 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.
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