Are Insiders Buying Wrap Technologies, Inc. (NASDAQ:WRTC) Stock?
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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Wrap Technologies, Inc. (NASDAQ:WRTC).
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 on the market. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. 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.’
View our latest analysis for Wrap Technologies
Wrap Technologies Insider Transactions Over The Last Year
Chief Technology Officer Elwood Norris made the biggest insider purchase in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$3.00 each. Even though the purchase was made at a significantly lower price, we still think insider buying is a positive. The insider buying may not tell us much about how insiders feel about the current share price.
In the last twelve months insiders paid US$1.1m for 358.83k shares purchased. In the last twelve months there was more buying than selling by Wrap Technologies insiders. The average buy price was around US$3.03. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today’s levels. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Wrap Technologies 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.
Insiders at Wrap Technologies Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Wrap Technologies. We can see that Executive Chairman Scot Cohen paid US$85k for shares in the company. No-one sold. This makes one think the business has some good points.
Does Wrap Technologies Boast High Insider Ownership?
Many investors like to check how much of a company is owned by 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. Wrap Technologies insiders own 59% of the company, currently worth about US$67m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Wrap Technologies Tell Us?
It’s certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Wrap Technologies insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .
Of course Wrap Technologies may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
