It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in PetIQ, Inc. (NASDAQ:PETQ).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
PetIQ Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Chief Financial Officer John Newland for US$980k worth of shares, at about US$22.28 per share. That means that an insider was happy to buy shares at around the current price of US$25.08. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider purchases were made at close to current prices.
Over the last year, we can see that insiders have bought 75.03k shares worth US$1.9m. But insiders sold 291 shares worth US$8.5k. Overall, PetIQ insiders were net buyers last year. They paid about US$24.69 on average. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
PetIQ is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
PetIQ Insiders Bought Stock Recently
Over the last quarter, PetIQ insiders have spent a meaningful amount on shares. We can see that Chief Financial Officer John Newland paid US$980k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.
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. From our data, it seems that PetIQ insiders own 1.0% of the company, worth about US$6.8m. We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About PetIQ Insiders?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that PetIQ insiders are expecting a bright future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for PetIQ.
Of course PetIQ 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.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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.
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