Anyone interested in Nathan's Famous, Inc. (NASDAQ:NATH) should probably be aware that the Independent Director, Brian Genson, recently divested US$121k worth of shares in the company, at an average price of US$86.25 each. That sale was 15% of their holding, so it does make us raise an eyebrow.
Nathan's Famous Insider Transactions Over The Last Year
Notably, that recent sale by Independent Director Brian Genson was not the only time they sold Nathan's Famous shares this year. They previously made an even bigger sale of -US$135k worth of shares at a price of US$68.00 per share. That means that even when the share price was below the current price of US$84.67, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 15% of Brian Genson's holding.
Brian Genson divested 4.90k shares over the last 12 months at an average price of US$73.18. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Does Nathan's Famous Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company 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. Nathan's Famous insiders own 31% of the company, currently worth about US$106m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Nathan's Famous Insider Transactions Indicate?
An insider sold Nathan's Famous shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Nathan's Famous is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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 found 2 warning signs for Nathan's Famous that deserve your attention before buying any shares.
Of course Nathan's Famous may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
