David Yuan Adds To Toast Holding \

Toast, Inc. (NYSE:TOST) shareholders (or potential shareholders) will be happy to see that insider David Yuan recently bought a whopping US$13m worth of stock, at a price of US$19.74. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by -104%.

Check out our latest analysis for Toast

The Last 12 Months Of Insider Transactions At Toast

The insider, Steven Papa, made the biggest insider sale in the last 12 months. That single transaction was for US$51m worth of shares at a price of US$14.23 each. That means that even when the share price was below the current price of US$18.73, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 25% of Steven Papa's holding.

All up, insiders sold more shares in Toast than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Toast insiders own 24% of the company, currently worth about US$2.4b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Toast Insider Transactions Indicate?

It is good to see the recent insider purchase. However, the longer term transactions are not so encouraging. The high levels of insider ownership, and the recent buying by an insider suggests they are well aligned and optimistic. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Toast. While conducting our analysis, we found that Toast has 3 warning signs and it would be unwise to ignore these.

But note: Toast 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.

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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.