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 before you buy or sell PetIQ, Inc. (NASDAQ:PETQ), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
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, 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.’
The Last 12 Months Of Insider Transactions At PetIQ
Over the last year, we can see that the biggest insider sale was by Chairman of the Board & CEO McCord Christensen for US$629k worth of shares, at about US$31.83 per share. That is hardly a positive sign, even though it took place above the latest price (US$21.60). So it is hard to draw any strong conclusion from it. McCord Christensen was the only individual insider to sell over the last year.
You can see the insider transactions 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 PetIQ better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership of PetIQ
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that PetIQ insiders own 1.4% of the company, worth about US$8.7m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About PetIQ Insiders?
An insider hasn’t bought PetIQ stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. When you consider that most companies have higher levels of insider ownership, we’re a little wary. So we’re not rushing to buy, to say the least. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for PetIQ.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 firstname.lastname@example.org.