It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Boot Barn Holdings, Inc. (NYSE:BOOT).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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.'
Boot Barn Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Independent Director, Brenda Morris, for US$196k worth of shares, at about US$28.04 per share. That means that an insider was selling shares at slightly below the current price (US$36.17). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 33.6% of Brenda Morris's holding.
Over the last year, we note insiders sold 13271 shares worth US$412k. In the last year Boot Barn Holdings insiders didn't buy any company stock. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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Boot Barn Holdings Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Boot Barn Holdings shares. In total, insiders dumped US$216k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership of Boot Barn Holdings
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. Based on our data, Boot Barn Holdings insiders have about 0.3% of the stock, worth approximately US$3.0m. I generally like to see higher levels of ownership.
What Might The Insider Transactions At Boot Barn Holdings Tell Us?
Insiders haven't bought Boot Barn Holdings stock in the last three months, but there was some selling. And even if we look to the last year, we didn't see any purchases. But since Boot Barn Holdings is profitable and growing, we're not too worried by this. When you consider that most companies have higher levels of insider ownership, we're a little wary. We'd certainly think twice before buying! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Boot Barn Holdings.
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.
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 firstname.lastname@example.org. 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.