Need To Know: Planet Fitness, Inc. (NYSE:PLNT) Insiders Have Been Buying Shares

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Planet Fitness, Inc. (NYSE:PLNT), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for Planet Fitness

The Last 12 Months Of Insider Transactions At Planet Fitness

In the last twelve months, the biggest single purchase by an insider was when CEO & Director Christopher Rondeau bought US$1.7m worth of shares at a price of US$67.24 per share. That means that an insider was happy to buy shares at around the current price of US$77.79. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Planet Fitness share holders is that insiders were buying at near the current price.

Happily, we note that in the last year insiders paid US$7.1m for 118.00k shares. But insiders sold 26.00 shares worth US$2.0k. Overall, Planet Fitness insiders were net buyers during the last year. Their average price was about US$60.41. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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).

Are Planet Fitness Insiders Buying Or Selling?

In the last three months, VP & Chief Accounting Officer Brian O'Donnell sold US$2.0k worth of shares. That's not much at all. Ultimately the overall selling isn't enough to tell us much.

Does Planet Fitness Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Planet Fitness insiders own about US$9.4m worth of shares (which is 0.1% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

What Might The Insider Transactions At Planet Fitness Tell Us?

While there has not been any insider buying in the last three months, there has been selling. But given the selling was modest, we're not worried. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if Planet Fitness insiders bought more shares in the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. When we did our research, we found 3 warning signs for Planet Fitness (2 shouldn't be ignored!) that we believe deserve your full attention.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

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This article by Simply Wall St is general in nature. 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.
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