We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell SunPower Corporation (NASDAQ:SPWR), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
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, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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’.
SunPower Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when VP, Corporate Controller & Principal Accounting Officer Vidul Prakash sold US$171k worth of shares at a price of US$6.88 per share. That means that an insider was selling shares at around the current price of US$6.44. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment.
We note that in the last year insiders divested 25.65k shares for a total of US$175k. In total, SunPower insiders sold more than they bought over the last year. The sellers received a price of around US$6.82, on average. It’s not particularly great to see insiders were selling shares around current prices. While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
SunPower Insiders Are Selling The Stock
Over the last three months, we’ve seen significant insider selling at SunPower. Specifically, insiders ditched US$175k worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the directors think that the shares are a bargain.
Insider Ownership of SunPower
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. Insiders own 0.9% of SunPower shares, worth about US$8.6m, according to our data. Whilst better than nothing, we’re not overly impressed by these holdings.
What Might The Insider Transactions At SunPower Tell Us?
Insiders haven’t bought SunPower stock in the last three months, but there was some selling. And there weren’t any purchases to give us comfort, over the last year. Insiders own relatively few shares in the company, and when you consider the sales, we’re not particularly excited about the stock. As the saying goes, only fools rush in. Of course, the future is what matters most. So if you are interested in SunPower, you should check out this free report on analyst forecasts for the company.
But note: SunPower 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 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.