Insiders Give Up US$31k As ONE Group Hospitality Stock Drops To US$3.98

Insiders who bought US$129.9k worth of The ONE Group Hospitality, Inc.'s (NASDAQ:STKS) stock at an average buy price of US$5.25 over the last year may be disappointed by the recent 20% decrease in the stock. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$98.5k which is not ideal.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for ONE Group Hospitality

ONE Group Hospitality Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Director Eugene Bullis bought US$100k worth of shares at a price of US$5.26 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$3.98). It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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 ONE Group Hospitality insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insiders At ONE Group Hospitality Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at ONE Group Hospitality. Not only was there no selling that we can see, but they collectively bought US$130k worth of shares. That shows some optimism about the company's future.

Does ONE Group Hospitality Boast High 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. ONE Group Hospitality insiders own about US$27m worth of shares. That equates to 21% of the company. 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 ONE Group Hospitality Tell Us?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Insiders likely see value in ONE Group Hospitality shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing ONE Group Hospitality. For example, ONE Group Hospitality has 3 warning signs (and 2 which are concerning) we think you should know about.

But note: ONE Group Hospitality 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com