Sonos President Acquires 28% More Stock

Those following along with Sonos, Inc. (NASDAQ:SONO) will no doubt be intrigued by the recent purchase of shares by Thomas Conrad, President of the company, who spent a stonking US$1.0m on stock at an average price of US$16.17. Not only is that a big swing, but it increased their holding size by 28%, which is definitely great to see.

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The Last 12 Months Of Insider Transactions At Sonos

In fact, the recent purchase by President Thomas Conrad was not their only acquisition of Sonos shares this year. Earlier in the year, they paid US$11.10 per share in a US$1.0m purchase. Even though the purchase was made at a significantly lower price than the recent price (US$16.17), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

While Sonos insiders bought shares during the last year, they didn't sell. They paid about US$12.49 on average. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for Sonos

Sonos is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Sonos insiders own about US$47m worth of shares. That equates to 2.4% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Sonos Insiders?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Sonos shares, given these transactions (along with notable insider ownership of the company). Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Sonos.

Of course Sonos 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.