Stock Analysis

Having purchased US$6.7m worth of The Beachbody Company, Inc. (NYSE:BODY) stock, the recent 32% pullback is not what insiders may have expected

Source: Shutterstock

The recent price decline of 32% in The Beachbody Company, Inc.'s (NYSE:BODY) stock may have disappointed insiders who bought US$6.7m worth of shares at an average price of US$1.43 in the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$2.7m, which is not what they expected.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Beachbody Company

The Last 12 Months Of Insider Transactions At Beachbody Company

In the last twelve months, the biggest single purchase by an insider was when Co-Founder Carl Daikeler bought US$1.9m worth of shares at a price of US$2.11 per share. That means that even when the share price was higher than US$0.58 (the recent price), an insider wanted to purchase shares. 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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While Beachbody Company insiders bought shares during the last year, they didn't sell. The average buy price was around US$1.43. This is nice to see since it implies that insiders might see value around current prices. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

NYSE:BODY Insider Trading Volume March 16th 2023

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Beachbody Company 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. Beachbody Company insiders own about US$94m worth of shares (which is 52% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Beachbody Company Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Beachbody Company insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Beachbody Company. You'd be interested to know, that we found 2 warning signs for Beachbody Company and we suggest you have a look.

But note: Beachbody Company 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, but not derivative transactions.

Valuation is complex, but we're helping make it simple.

Find out whether Beachbody Company is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis