Insiders of Starbucks Corporation (NASDAQ:SBUX) are up 18% on their US$21m purchase after Starbucks Corporation (NASDAQ:SBUX) rose 3.5% last week
Starbucks Corporation (NASDAQ:SBUX) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 3.5% resulting in a US$3.5b addition to the company’s market value. In other words, the original US$21m purchase is now worth US$25m.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for Starbucks
Starbucks Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CEO, Founder & Director Howard Schultz bought US$10.0m worth of shares at a price of US$73.10 per share. Even though the purchase was made at a significantly lower price than the recent price (US$90.12), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months insiders purchased 274.75k shares for US$21m. But insiders sold 26.96k shares worth US$3.0m. In the last twelve months there was more buying than selling by Starbucks insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Starbucks 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 Starbucks Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Starbucks. Not only was there no selling that we can see, but they collectively bought US$6.0m worth of shares. That shows some optimism about the company's future.
Insider Ownership
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. A high insider ownership often makes company leadership more mindful of shareholder interests. Starbucks insiders own 2.1% of the company, currently worth about US$2.1b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Starbucks Tell Us?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Starbucks insiders are well aligned, and quite possibly think the share price is too low. Looks promising! 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. At Simply Wall St, we've found that Starbucks has 3 warning signs (2 shouldn't be ignored!) that deserve your attention before going any further with your analysis.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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