We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Build-A-Bear Workshop, Inc. (NYSE:BBW).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Build-A-Bear Workshop Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Director David Kanen for US$271k worth of shares, at about US$5.79 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$3.74). 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. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Build-A-Bear Workshop insiders may have bought shares in the last year, but they didn't sell any. Their average price was about US$5.12. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by 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!
Build-A-Bear Workshop is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Have Build-A-Bear Workshop Insiders Traded Recently?
We saw some Build-A-Bear Workshop insider buying shares in the last three months. Non-Executive Chairman Craig Leavitt purchased US$9.5k worth of shares in that period. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.
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 indicates that Build-A-Bear Workshop insiders own about US$4.6m worth of shares (which is 8.3% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Do The Build-A-Bear Workshop Insider Transactions Indicate?
Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Build-A-Bear Workshop insiders are doubting the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Build-A-Bear Workshop.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.