Don't Ignore The Fact That This Insider Just Sold Some Shares In Vera Bradley, Inc. (NASDAQ:VRA)

By
Simply Wall St
Published
December 18, 2020

We'd be surprised if Vera Bradley, Inc. (NASDAQ:VRA) shareholders haven't noticed that the Chairman, Robert Hall, recently sold US$378k worth of stock at US$7.55 per share. On the bright side, that sale was only 8.2% of their holding, so we doubt it's very meaningful, on its own.

View our latest analysis for Vera Bradley

The Last 12 Months Of Insider Transactions At Vera Bradley

Over the last year, we can see that the biggest insider purchase was by Co-Founder Patricia Miller for US$10m worth of shares, at about US$11.73 per share. That means that even when the share price was higher than US$7.78 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. We note that Patricia Miller was both the biggest buyer and the biggest seller.

Happily, we note that in the last year insiders paid US$11m for 918.72k shares. But they sold 1.10m shares for US$12m. Over the last year we saw more insider selling of Vera Bradley 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:VRA Insider Trading Volume December 18th 2020

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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. We usually like to see fairly high levels of insider ownership. Insiders own 33% of Vera Bradley shares, worth about US$86m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Vera Bradley Insider Transactions Indicate?

Insiders haven't bought Vera Bradley stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Vera Bradley makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! 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. At Simply Wall St, we found 2 warning signs for Vera Bradley that deserve your attention before buying any shares.

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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This article by Simply Wall St is general in nature. 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.
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