Investors who take an interest in Potbelly Corporation (NASDAQ:PBPB) should definitely note that insider Neil Luthra recently paid US$2.79 per share to buy US$137k worth of the stock. We reckon that's a good sign, especially since the purchase boosted their holding by 757%.
The Last 12 Months Of Insider Transactions At Potbelly
Notably, that recent purchase by Neil Luthra is the biggest insider purchase of Potbelly shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of US$2.08. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably Neil Luthra was also the biggest seller.
Over the last year, we can see that insiders have bought 61.41k shares worth US$193k. On the other hand they divested 15000 shares, for US$71k. In the last twelve months there was more buying than selling by Potbelly insiders. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of Potbelly
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests Potbelly insiders own 2.2% of the company, worth about US$1.1m. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Potbelly Tell Us?
It's certainly positive to see the recent insider purchase. 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. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Potbelly stock. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. In terms of investment risks, we've identified 3 warning signs with Potbelly and understanding these should be part of your investment process.
Of course Potbelly 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, but not derivative transactions.
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