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 before you buy or sell Williams-Sonoma, Inc. (NYSE:WSM), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
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 don’t think shareholders should simply follow insider transactions. 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.’
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The Last 12 Months Of Insider Transactions At Williams-Sonoma
In the last twelve months, the biggest single sale by an insider was when Executive VP David King sold US$1.7m worth of shares at a price of US$68.88 per share. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$57.00. So it may not tell us anything about how insiders feel about the current share price.
Over the last year, we note insiders sold 90.98k shares worth US$5.6m. In total, Williams-Sonoma insiders sold more than they bought over the last year. They sold for an average price of about US$61.13. We don’t gain much confidence from insider selling near the recent share price of US$57.00. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Williams-Sonoma better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does Williams-Sonoma Boast High 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. It appears that Williams-Sonoma insiders own 0.9% of the company, worth about US$39m. 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 Does This Data Suggest About Williams-Sonoma Insiders?
It doesn’t really mean much that no insider has traded Williams-Sonoma shares in the last quarter. Still, the insider transactions at Williams-Sonoma in the last 12 months are not very heartening. But it’s good to see that insiders own shares in the company. Of course, the future is what matters most. So if you are interested in Williams-Sonoma, you should check out this free report on analyst forecasts for the company.
But note: Williams-Sonoma 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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If you spot an error that warrants correction, please contact the editor at email@example.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.