Last week, BigBear.ai Holdings, Inc.'s (NYSE:BBAI) stock jumped 24%, but insiders who sold US$2.1m worth of stock in over the past year are likely to be in a better position. Selling at an average price of US$2.26, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At BigBear.ai Holdings
In the last twelve months, the biggest single sale by an insider was when the insider, Avishay Katz, sold US$620k worth of shares at a price of US$2.64 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$1.49. So it may not tell us anything about how insiders feel about the current share price.
All up, insiders sold more shares in BigBear.ai Holdings than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
Insiders At BigBear.ai Holdings Have Bought Stock Recently
Over the last quarter, BigBear.ai Holdings insiders have spent a meaningful amount on shares. We can see that Independent Director Pamela Braden paid US$210k for shares in the company. No-one sold. That shows some optimism about the company's future.
Insider Ownership Of BigBear.ai Holdings
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that BigBear.ai Holdings insiders own about US$5.5m worth of shares (which is 1.6% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At BigBear.ai Holdings Tell Us?
The recent insider purchase is heartening. On the other hand the transaction history, over the last year, isn't so positive. The transactions over the last year don't give us confidence, and nor does the fairly low insider ownership, but at least the recent buying is a positive. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that BigBear.ai Holdings has 3 warning signs (1 shouldn't be ignored!) that deserve your attention before going any further with your analysis.
But note: BigBear.ai Holdings 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com