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Quite a few insiders have dramatically grown their holdings in PetIQ, Inc. (NASDAQ:PETQ) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
PetIQ Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the insider, Ronald Kennedy, sold US$1.2m worth of shares at a price of US$39.74 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$16.36. So it is hard to draw any strong conclusion from it.
Over the last year, we can see that insiders have bought 83.48k shares worth US$1.6m. But they sold 32.66k shares for US$1.3m. In the last twelve months there was more buying than selling by PetIQ insiders. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders at PetIQ Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at PetIQ. Overall, two insiders shelled out US$172k for shares in the company -- and none sold. That shows some optimism about the company's future.
Insider Ownership of PetIQ
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. From our data, it seems that PetIQ insiders own 1.1% of the company, worth about US$5.1m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Does This Data Suggest About PetIQ Insiders?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that PetIQ insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing PetIQ. To help with this, we've discovered 2 warning signs (1 is concerning!) that you ought to be aware of before buying any shares in PetIQ.
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, but not derivative transactions.
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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.