Stock Analysis

Have Insiders Been Buying Vivint Smart Home, Inc. (NYSE:VVNT) Shares This Year?

  •  Updated
NYSE:VVNT
Source: Shutterstock

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Vivint Smart Home, Inc. (NYSE:VVNT).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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'.

Check out our latest analysis for Vivint Smart Home

The Last 12 Months Of Insider Transactions At Vivint Smart Home

Over the last year, we can see that the biggest insider purchase was by CEO & Director Todd Pedersen for US$628k worth of shares, at about US$19.36 per share. That implies that an insider found the current price of US$22.50 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Vivint Smart Home share holders is that insiders were buying at near the current price.

While Vivint Smart Home insiders bought shares during the last year, they didn't sell. They paid about US$14.58 on average. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. 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!

insider-trading-volume
NYSE:VVNT Insider Trading Volume December 8th 2020

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

Insider Ownership of Vivint Smart Home

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It's great to see that Vivint Smart Home insiders own 3.2% of the company, worth about US$142m. 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 Vivint Smart Home Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Vivint Smart Home insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Vivint Smart Home has 2 warning signs we think you should be aware of.

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.

When trading Vivint Smart Home or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted


What are the risks and opportunities for Vivint Smart Home?

Vivint Smart Home, Inc., together with its subsidiaries, engages in the sale, installation, servicing, and monitoring of smart home and security systems primarily in the United States and Canada.

View Full Analysis

Rewards

  • Revenue is forecast to grow 7.16% per year

  • Earnings have grown 12.1% per year over the past 5 years

Risks

  • Earnings are forecast to decline by an average of 2.6% per year for the next 3 years

  • Negative shareholders equity

  • Shareholders have been diluted in the past year

  • Volatile share price over the past 3 months

  • Currently unprofitable and not forecast to become profitable over the next 3 years

View all Risks and Rewards

Share Price

Market Cap

1Y Return

View Company Report