Insiders of Freshpet, Inc. (NASDAQ:FRPT) received good value on their investment after their US$6.9m purchase jumped US$4.0m in value

Last week, Freshpet, Inc. (NASDAQ:FRPT) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 10% last week, resulting in a US$295m increase in the company's market worth. In other words, the original US$6.9m purchase is now worth US$11m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Freshpet

The Last 12 Months Of Insider Transactions At Freshpet

Over the last year, we can see that the biggest insider purchase was by insider Diane Dietz for US$3.2m worth of shares, at about US$41.57 per share. Even though the purchase was made at a significantly lower price than the recent price (US$65.88), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months Freshpet insiders were buying shares, but not selling. 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!

Freshpet is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Freshpet Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Freshpet insiders own about US$78m worth of shares. That equates to 2.5% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Freshpet Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Freshpet shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Freshpet and their transactions don't cause us concern. 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. To help with this, we've discovered 2 warning signs (1 is a bit unpleasant!) that you ought to be aware of before buying any shares in Freshpet.

Of course Freshpet may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.