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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 Grid Dynamics Holdings, Inc. (NASDAQ:GDYN).
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.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
The Last 12 Months Of Insider Transactions At Grid Dynamics Holdings
The Founder & Executive VP of Customer Success Victoria Livschitz made the biggest insider purchase in the last 12 months. That single transaction was for US$1.5m worth of shares at a price of US$11.73 each. We do like to see buying, but this purchase was made at well below the current price of US$15.37. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Over the last year, we can see that insiders have bought 159.20k shares worth US$1.7m. On the other hand they divested 10.00k shares, for US$155k. Overall, Grid Dynamics Holdings insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Grid Dynamics Holdings 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.
Grid Dynamics Holdings Insiders Are Selling The Stock
The last three months saw significant insider selling at Grid Dynamics Holdings. In total, Vice President of Corporate Development Stan Klimoff sold US$155k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
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. Grid Dynamics Holdings insiders own about US$60m worth of shares. That equates to 7.2% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Grid Dynamics Holdings Insiders?
An insider sold Grid Dynamics Holdings shares recently, but they didn't buy any. On the other hand, the insider transactions over the last year are encouraging. We like that insiders own a fair amount of the company. So the recent selling doesn't worry us too much. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Grid Dynamics Holdings. Every company has risks, and we've spotted 2 warning signs for Grid Dynamics Holdings you should know about.
Of course Grid Dynamics Holdings 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.
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. 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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