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Need To Know: Sportsman's Warehouse Holdings, Inc. (NASDAQ:SPWH) Insiders Have Been Buying Shares

Simply Wall St

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 we'll take a look at whether insiders have been buying or selling shares in Sportsman's Warehouse Holdings, Inc. (NASDAQ:SPWH).

Do Insider Transactions Matter?

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 don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for Sportsman's Warehouse Holdings

The Last 12 Months Of Insider Transactions At Sportsman's Warehouse Holdings

Over the last year, we can see that the biggest insider purchase was by Director Richard McBee for US$90k worth of shares, at about US$4.52 per share. That means that even when the share price was higher than US$4.22 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months insiders paid US$205k for 48400 shares purchased. In the last twelve months Sportsman's Warehouse Holdings insiders were buying shares, but not selling. 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!

NasdaqGS:SPWH Recent Insider Trading, August 31st 2019

Sportsman's Warehouse Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at Sportsman's Warehouse Holdings Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Sportsman's Warehouse Holdings. Specifically, President Jon Barker bought US$52k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests Sportsman's Warehouse Holdings insiders own 2.2% of the company, worth about US$4.0m. We consider this fairly low insider ownership.

What Might The Insider Transactions At Sportsman's Warehouse Holdings Tell Us?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Sportsman's Warehouse Holdings insiders are expecting a bright future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

But note: Sportsman's Warehouse Holdings 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.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.