Executive VP Michael Cramer Just Sold A Bunch Of Shares In Hostess Brands, Inc. (NASDAQ:TWNK)

By
Simply Wall St
Published
May 16, 2022
NasdaqCM:TWNK
Source: Shutterstock

Some Hostess Brands, Inc. (NASDAQ:TWNK) shareholders may be a little concerned to see that the Executive VP, Michael Cramer, recently sold a substantial US$554k worth of stock at a price of US$22.15 per share. That's a big disposal, and it decreased their holding size by 35%, which is notable but not too bad.

See our latest analysis for Hostess Brands

Hostess Brands Insider Transactions Over The Last Year

Notably, that recent sale by Michael Cramer is the biggest insider sale of Hostess Brands shares that we've seen in the last year. That means that even when the share price was below the current price of US$23.56, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 35%of Michael Cramer's holding.

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!

insider-trading-volume
NasdaqCM:TWNK Insider Trading Volume May 16th 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership of Hostess Brands

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. Hostess Brands insiders own about US$15m worth of shares. That equates to 0.5% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Hostess Brands Insider Transactions Indicate?

An insider hasn't bought Hostess Brands stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. On the plus side, Hostess Brands makes money, and is growing profits. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. 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 that end, you should learn about the 3 warning signs we've spotted with Hostess Brands (including 1 which shouldn't be ignored).

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.

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