Lead Independent Director of Grocery Outlet Holding Picks Up 26% More Stock

Those following along with Grocery Outlet Holding Corp. (NASDAQ:GO) will no doubt be intrigued by the recent purchase of shares by Erik Ragatz, Lead Independent Director of the company, who spent a stonking US$2.0m on stock at an average price of US$12.25. Aside from being a solid chunk in its own right, the deft move also saw their holding increase by some 26%.

See our latest analysis for Grocery Outlet Holding

Grocery Outlet Holding Insider Transactions Over The Last Year

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. That means that an insider was happy to buy shares at above the current price of US$11.32. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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.

In the last twelve months insiders purchased 431.50k shares for US$7.5m. But they sold 162.32k shares for US$4.1m. Overall, Grocery Outlet Holding insiders were net buyers during the last year. The average buy price was around US$17.31. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, 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

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 3.9% of Grocery Outlet Holding shares, worth about US$43m. 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 Does This Data Suggest About Grocery Outlet Holding Insiders?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in Grocery Outlet Holding shares, given these transactions (along with notable insider ownership of the company). 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. For example - Grocery Outlet Holding has 4 warning signs we think you should be aware of.

But note: Grocery Outlet Holding may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.