Stock Analysis

Don't Ignore The Fact That This Insider Just Sold Some Shares In Sovos Brands, Inc. (NASDAQ:SOVO)

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Some Sovos Brands, Inc. (NASDAQ:SOVO) shareholders may be a little concerned to see that the VP of Strategic Initiatives & Director, Robert Graves, recently sold a substantial US$703k worth of stock at a price of US$14.14 per share. However, that sale only accounted for 1.3% of their holding, so arguably it doesn't say much about their conviction.

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The Last 12 Months Of Insider Transactions At Sovos Brands

In fact, the recent sale by Robert Graves was the biggest sale of Sovos Brands shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at slightly below the current price (US$14.81). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 1.3% of Robert Graves's holding.

In the last year Sovos Brands insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

NasdaqGS:SOVO Insider Trading Volume March 19th 2023

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Insider Ownership Of Sovos Brands

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Sovos Brands insiders own 9.1% of the company, currently worth about US$135m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Sovos Brands Tell Us?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Sovos Brands. You'd be interested to know, that we found 1 warning sign for Sovos Brands and we suggest you have a look.

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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.

What are the risks and opportunities for Sovos Brands?

Sovos Brands, Inc., through its subsidiaries, operates as a consumer-packaged food company that manufactures and distributes consumer food products in the United States.

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  • Earnings are forecast to grow 109.58% per year


  • Significant insider selling over the past 3 months

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