Grocery Outlet Holding Lead Independent Director Acquires 21% More Stock

Grocery Outlet Holding Corp. (NASDAQ:GO) shareholders (or potential shareholders) will be happy to see that the Lead Independent Director, Erik Ragatz, recently bought a whopping US$2.0m worth of stock, at a price of US$18.25. Aside from being a solid chunk in its own right, the deft move also saw their holding increase by some 21%.

Check out our latest analysis for Grocery Outlet Holding

The Last 12 Months Of Insider Transactions At Grocery Outlet Holding

In fact, the recent purchase by Lead Independent Director Erik Ragatz was not their only acquisition of Grocery Outlet Holding shares this year. Earlier in the year, they paid US$20.91 per share in a US$2.1m purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$18.63). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months insiders purchased 256.50k shares for US$5.3m. But they sold 169.06k shares for US$4.5m. In the last twelve months there was more buying than selling by Grocery Outlet Holding insiders. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Grocery Outlet Holding insiders own 3.9% of the company, worth about US$70m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Grocery Outlet Holding Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of Grocery Outlet Holding we think they are probably pretty confident of a bright future. While it's good to be aware of 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. While conducting our analysis, we found that Grocery Outlet Holding has 1 warning sign and it would be unwise to ignore it.

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 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.