It is not uncommon to see companies perform well in the years after insiders buy shares. 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 GreenSky Inc (NASDAQ:GSKY).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
GreenSky Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Director Robert Sheft bought US$3.0m worth of shares at a price of US$9.85 per share. That means that even when the share price was higher, an insider wanted to purchase shares. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We generally consider it a positive if insiders have been buying on market, even above the current price.
Over the last year, we can see that insiders have bought 394.45k shares worth US$4.2m. In the last twelve months there was more buying than selling by GreenSky insiders. Their average price was about US$10.72. This is nice to see since it implies that insiders might see value around current prices (around US$9.14). 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!
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GreenSky Insiders Bought Stock Recently
It’s good to see that GreenSky insiders have made notable investments in the company’s shares. Overall, 2 insiders shelled out US$3.2m for shares in the company — and none sold. This is a positive in our book as it implies some confidence.
Insider Ownership of GreenSky
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. Insiders own 0.9% of GreenSky shares, worth about US$15m. While this is strong but not in the top group, when it comes to insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About GreenSky Insiders?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on GreenSky stock. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course GreenSky may not be the best stock to buy. So you may wish to see this free collection of high quality 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 email@example.com.