Stock Analysis

With Peloton Interactive, Inc.'s (NASDAQ:PTON)) price down 7.8% this week, insiders might find some solace having sold US$1.6m worth of shares earlier this year.

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By selling US$1.6m worth of Peloton Interactive, Inc. (NASDAQ:PTON) stock at an average sell price of US$103 over the last year, insiders seemed to have made the most of their holdings. After the stock price dropped 7.8% last week, the company's market value declined by US$2.2b, but insiders were able to mitigate their losses.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Peloton Interactive

Peloton Interactive Insider Transactions Over The Last Year

The Independent Director, Jonathan Callaghan, made the biggest insider sale in the last 12 months. That single transaction was for US$1.6m worth of shares at a price of US$107 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$87.05. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Jonathan Callaghan.

You can see the insider transactions (by companies and individuals) 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!

NasdaqGS:PTON Insider Trading Volume October 1st 2021

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Peloton Interactive insiders own about US$1.8b worth of shares (which is 6.7% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Peloton Interactive Tell Us?

It doesn't really mean much that no insider has traded Peloton Interactive shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Peloton Interactive insider transactions don't fill us with confidence. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Peloton Interactive. While conducting our analysis, we found that Peloton Interactive has 2 warning signs and it would be unwise to ignore them.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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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