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 Tile Shop Holdings, Inc. (NASDAQ:TTS).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Tile Shop Holdings Insider Transactions Over The Last Year
Director Peter Jacullo made the biggest insider purchase in the last 12 months. That single transaction was for US$2.3m worth of shares at a price of US$5.95 each. That means that an insider was happy to buy shares at above the current price. Their view may have changed since then, but at least it shows they felt optimistic at the time. We generally consider it a positive if insiders have been buying on market, even above the current price.
Happily, we note that in the last year insiders bought 1.50m shares for a total of US$8.6m. In total, Tile Shop Holdings insiders bought more than they sold over the last year. They paid about US$5.76 on average. This is nice to see since it implies that insiders might see value around current prices (around US$5.59). The chart below shows insider transactions over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Tile Shop Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Tile Shop Holdings Insiders Bought Stock Recently
Over the last quarter, Tile Shop Holdings insiders have spent a meaningful amount on shares. Overall, 3 insiders shelled out US$3.4m for shares in the company — and none sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership of Tile Shop Holdings
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It’s great to see that Tile Shop Holdings insiders own 27% of the company, worth about US$81m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Tile Shop Holdings Insider Transactions Indicate?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. Insiders likely see value in Tile Shop Holdings shares, given these transactions (along with notable insider ownership of the company). Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Tile Shop Holdings.
But note: Tile Shop Holdings 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.