Have Insiders Sold Sprouts Farmers Market Shares Recently?

Some Sprouts Farmers Market, Inc. (NASDAQ:SFM) shareholders may be a little concerned to see that the Independent Non-Executive Chairman, Joseph Fortunato, recently sold a substantial US$828k worth of stock at a price of US$63.71 per share. That sale reduced their total holding by 21% which is hardly insignificant, but far from the worst we've seen.

See our latest analysis for Sprouts Farmers Market

Sprouts Farmers Market Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Lawrence Molloy, sold US$2.9m worth of shares at a price of US$40.30 per share. That means that even when the share price was below the current price of US$63.35, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 41% of Lawrence Molloy's stake.

In the last year Sprouts Farmers Market insiders didn't buy any company stock. 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!

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).

Insider Ownership Of Sprouts Farmers Market

Many investors like to check how much of a company is owned by 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. Sprouts Farmers Market insiders own about US$28m worth of shares. That equates to 0.4% of the company. 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 Sprouts Farmers Market Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But since Sprouts Farmers Market is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 1 warning sign for Sprouts Farmers Market and we suggest you have a look.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.