Sweetgreen Co-Founder Acquires 14% More Stock

Sweetgreen, Inc. (NYSE:SG) shareholders (or potential shareholders) will be happy to see that the Co-Founder, Jonathan Neman, recently bought a whopping US$1m worth of stock, at a price of US$5.56. Not only is that a big swing, but it increased their holding size by 14%, which is definitely great to see.

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The Last 12 Months Of Insider Transactions At Sweetgreen

In fact, the recent purchase by Co-Founder Jonathan Neman was not their only trade of Sweetgreen shares this year. Earlier in the year, they sold shares at a price ofUS$37.73 per share in a -US$6.4m transaction. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$5.94). So it may not shed much light on insider confidence at current levels.

Happily, we note that in the last year insiders paid US$1.4m for 217.12k shares. But insiders sold 651.86k shares worth US$24m. In total, Sweetgreen insiders sold more than they bought over the last year. The sellers received a price of around US$36.34, on average. We are not joyful about insider selling. But the selling was at much higher prices than the current share price (US$5.94), so it probably doesn't tell us a lot about the value on offer today. 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!

Check out our latest analysis for Sweetgreen

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 Of Sweetgreen

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. Sweetgreen insiders own about US$80m worth of shares. That equates to 13% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Sweetgreen Tell Us?

It's certainly positive to see the recent insider purchases. On the other hand the transaction history, over the last year, isn't so positive. While recent transactions indicate confidence in Sweetgreen, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. So they seem pretty well aligned, overall. 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 2 warning signs for Sweetgreen that deserve your attention before buying any shares.

But note: Sweetgreen 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.