We often see insiders buying up shares in companies that perform well over the long term. 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 shareholders might well want to know whether insiders have been buying or selling shares in Willamette Valley Vineyards, Inc. (NASDAQ:WVVI).
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, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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.’
The Last 12 Months Of Insider Transactions At Willamette Valley Vineyards
Over the last year, we can see that the biggest insider sale was by Co-Founder James Bernau for US$95k worth of shares, at about US$8.25 per share. So we know that an insider sold shares at around the present share price of US$7.45. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment. James Bernau was the only individual insider to sell shares in the last twelve months.
Over the last year, we can see that insiders have bought 3.12k shares worth US$26k. But insiders sold 32.78k shares worth US$271k. James Bernau divested 32.78k shares over the last 12 months at an average price of US$8.27. 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of Willamette Valley Vineyards
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. It appears that Willamette Valley Vineyards insiders own 25% of the company, worth about US$9.2m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Willamette Valley Vineyards Insider Transactions Indicate?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. Still, the insider transactions at Willamette Valley Vineyards in the last 12 months are not very heartening. But it’s good to see that insiders own shares in the company. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
But note: Willamette Valley Vineyards may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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