XPEL, Inc.'s (NASDAQ:XPEL)) market cap declines to US$1.5b but insiders who sold US$58m stock were able to hedge their losses

Simply Wall St
March 15, 2022
Source: Shutterstock

Insiders seem to have made the most of their holdings by selling US$58m worth of XPEL, Inc. (NASDAQ:XPEL) stock at an average sell price of US$80.50 during the past year. The company’s market cap plunged by US$59m after price dropped by 3.8% last week but insiders were able to limit their loss to an extent.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for XPEL

The Last 12 Months Of Insider Transactions At XPEL

The Lead Independent Director, Mark Adams, made the biggest insider sale in the last 12 months. That single transaction was for US$8.3m worth of shares at a price of US$85.23 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$54.21. So it may not tell us anything about how insiders feel about the current share price.

In the last year XPEL insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

NasdaqCM:XPEL Insider Trading Volume March 15th 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership of XPEL

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that XPEL insiders own 31% of the company, worth about US$466m. 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 XPEL Insider Transactions Indicate?

It doesn't really mean much that no insider has traded XPEL shares in the last quarter. While we feel good about high insider ownership of XPEL, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing XPEL. At Simply Wall St, we've found that XPEL has 2 warning signs (1 is a bit unpleasant!) that deserve your attention before going any further with your analysis.

Of course XPEL 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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.