With United Natural Foods Up 11%, Insider Buyers Count Their Returns

United Natural Foods, Inc. (NYSE:UNFI) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 11%, resulting in a US$96m rise in the company's market capitalisation, translating to a gain of 30% on their initial investment. As a result, the stock they originally bought for US$300.4k is now worth US$390.1k.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for United Natural Foods

The Last 12 Months Of Insider Transactions At United Natural Foods

Over the last year, we can see that the biggest insider sale was by the insider, Ann Bates, for US$240k worth of shares, at about US$14.94 per share. That means that an insider was selling shares at slightly below the current price (US$16.94). 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. We note that the biggest single sale was 100% of Ann Bates's holding.

Over the last year, we can see that insiders have bought 23.03k shares worth US$300k. But insiders sold 20.44k shares worth US$290k. In total, United Natural Foods insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

United Natural Foods is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

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 1.7% of United Natural Foods shares, worth about US$17m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The United Natural Foods Insider Transactions Indicate?

The fact that there have been no United Natural Foods insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in United Natural Foods and we see no evidence to suggest they are worried about the 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. At Simply Wall St, we found 1 warning sign for United Natural Foods that deserve your attention before buying any shares.

Of course United Natural Foods may not be the best stock to buy. So you may wish to see this free collection of high quality 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.