Stock Analysis

This Insider Has Just Sold Shares In Workhorse Group Inc. (NASDAQ:WKHS)

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NasdaqCM:WKHS
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Some Workhorse Group Inc. (NASDAQ:WKHS) shareholders may be a little concerned to see that the Independent Director, H. Samuels, recently sold a substantial US$2.5m worth of stock at a price of US$25.01 per share. However, that sale only accounted for 6.0% of their holding, so arguably it doesn't say much about their conviction.

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The Last 12 Months Of Insider Transactions At Workhorse Group

Notably, that recent sale by H. Samuels is the biggest insider sale of Workhorse Group shares that we've seen in the last year. That means that even when the share price was below the current price of US$27.85, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 6.0%of H. Samuels's holding.

In the last year Workhorse Group insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) 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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NasdaqCM:WKHS Insider Trading Volume November 26th 2020

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Does Workhorse Group Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Workhorse Group insiders own 7.4% of the company, currently worth about US$249m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Workhorse Group Insider Transactions Indicate?

Insiders sold Workhorse Group shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To that end, you should learn about the 4 warning signs we've spotted with Workhorse Group (including 2 which are a bit unpleasant).

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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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What are the risks and opportunities for Workhorse Group?

Workhorse Group Inc., a technology company, engages in design, manufacture, and sale of zero-emission commercial vehicles in the United States.

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Rewards

  • Revenue is forecast to grow 82.25% per year

Risks

  • Makes less than USD$1m in revenue ($-424K)

  • Shareholders have been diluted in the past year

  • Currently unprofitable and not forecast to become profitable over the next 3 years

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