Trade Alert: Independent Non-Executive Chairman Of Sprouts Farmers Market Joseph Fortunato Has Sold Stock

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$1.5m worth of stock at a price of US$133 per share. That sale reduced their total holding by 28% which is hardly insignificant, but far from the worst we've seen.

See our latest analysis for Sprouts Farmers Market

The Last 12 Months Of Insider Transactions At Sprouts Farmers Market

The CEO & Director, Jack Sinclair, made the biggest insider sale in the last 12 months. That single transaction was for US$4.2m worth of shares at a price of US$63.56 each. That means that an insider was selling shares at slightly below the current price (US$141). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 25% of Jack Sinclair's holding.

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 want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.4% of Sprouts Farmers Market shares, worth about US$55m. 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 Sprouts Farmers Market Tell Us?

Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, Sprouts Farmers Market makes money, and is growing profits. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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. Every company has risks, and we've spotted 1 warning sign for Sprouts Farmers Market you should know about.

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.