Insiders probably made the right decision selling US$670k worth of shares earlier this year as Smith & Wesson Brands, Inc.'s (NASDAQ:SWBI)) stock dips by 8.0%.

Simply Wall St
May 12, 2022
Source: Shutterstock

Insiders seem to have made the most of their holdings by selling US$670k worth of Smith & Wesson Brands, Inc. (NASDAQ:SWBI) stock at an average sell price of US$25.97 during the past year. The company's market worth decreased by US$54m over the past week after the stock price dropped 8.0%, although insiders were able to minimize their losses

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Smith & Wesson Brands

The Last 12 Months Of Insider Transactions At Smith & Wesson Brands

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Barry Monheit, sold US$277k worth of shares at a price of US$27.65 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$13.57). So it is hard to draw any strong conclusion from it.

Over the last year, we can see that insiders have bought 3.71k shares worth US$61k. But they sold 25.78k shares for US$670k. Over the last year we saw more insider selling of Smith & Wesson Brands shares, than buying. 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!

NasdaqGS:SWBI Insider Trading Volume May 12th 2022

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).

Are Smith & Wesson Brands Insiders Buying Or Selling?

There was only a small bit of insider buying, worth US$5.0k, in the last three months. Looking at the net result, we don't think these recent trades shed much light on how insiders, as a group, are feeling about the company's prospects.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Smith & Wesson Brands insiders own about US$10m worth of shares. That equates to 1.7% 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.

What Might The Insider Transactions At Smith & Wesson Brands Tell Us?

Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. We don't take much encouragement from the transactions by Smith & Wesson Brands insiders. But we do like the fact that insiders own a fair chunk of 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. At Simply Wall St, we've found that Smith & Wesson Brands has 3 warning signs (1 is concerning!) that deserve your attention before going any further with your analysis.

Of course Smith & Wesson Brands 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.