Sleep Number Corporation's stock is down 12%, but insiders still have about US$32k in profit after buying earlier this year
Insiders who bought Sleep Number Corporation (NASDAQ:SNBR) in the last 12 months may probably not pay attention to the stock's recent 12% drop. Reason being, despite the recent loss, insiders original purchase value of US$171k is now worth US$203k.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Sleep Number
Sleep Number Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Julie Howard for US$171k worth of shares, at about US$26.31 per share. Even though the purchase was made at a significantly lower price than the recent price (US$31.26), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
You can see the insider transactions (by companies and 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Sleep Number Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Sleep Number shares. Specifically, Independent Director Brenda Lauderback ditched US$93k 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.
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. We usually like to see fairly high levels of insider ownership. Sleep Number insiders own about US$28m worth of shares. That equates to 4.1% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Sleep Number Insiders?
An insider sold stock recently, but they haven't been buying. But we take heart from prior transactions. It's good to see insiders are shareholders. So the recent selling doesn't worry us too much. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. When we did our research, we found 5 warning signs for Sleep Number (2 are a bit unpleasant!) that we believe deserve your full attention.
Of course Sleep Number may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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