Selling Funko Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Despite the fact that Funko, Inc.'s (NASDAQ:FNKO) value has dropped 12% in the last week insiders who sold US$1.0m worth of stock in the past 12 months have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of US$10.38 is still lower than the current share price.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Funko

Over the last year, we can see that the biggest insider sale was by the Director, Michael Lunsford, for US$1.0m worth of shares, at about US$10.40 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$2.89. So it is hard to draw any strong conclusion from it.

Happily, we note that in the last year insiders paid US$213k for 29.00k shares. But they sold 97.75k shares for US$1.0m. All up, insiders sold more shares in Funko than they bought, over the last year. 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!

See our latest analysis for Funko

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Does Funko Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests Funko insiders own 1.0% of the company, worth about US$2.0m. I generally like to see higher levels of ownership.

So What Do The Funko Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. The insider transactions at Funko are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Funko has 3 warning signs and it would be unwise to ignore them.

Of course Funko 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.