Read This Before Buying Overstock.com, Inc. (NASDAQ:OSTK) Shares
We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Overstock.com, Inc. (NASDAQ:OSTK).
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 equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
See our latest analysis for Overstock.com
The Last 12 Months Of Insider Transactions At Overstock.com
Chief Marketing Officer John Knab made the biggest insider sale in the last 12 months. That single transaction was for US$80k worth of shares at a price of US$39.75 each. That is hardly a positive sign, even though it took place above the latest price (US$21.06). So it is hard to draw any strong conclusion from it.
Over the last year, we note insiders sold 8.90k shares worth US$312k. All up, insiders sold more shares in Overstock.com than they bought, over the last year. The sellers received a price of around US$35.09, on average. We are not joyful about insider selling. However, we do note that the average sale price was significantly higher than the current share price (which is US$21.06). 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!
I will like Overstock.com better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Have Overstock.com Insiders Traded Recently?
In the last three months company VP of Legal & General Counsel Eric Nickle divested US$3.0k worth of stock. That is not a lot. Ultimately the overall selling isn’t enough to tell us much.
Does Overstock.com Boast High 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. We usually like to see fairly high levels of insider ownership. It appears that Overstock.com insiders own 4.7% of the company, worth about US$32m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Overstock.com Tell Us?
Our data shows a little more insider selling than buying in the last three months. But the difference is small, and thus, not concerning. Recent sales exacerbate our caution arising from analysis of Overstock.com insider transactions. 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 Overstock.com, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
