Chief Sales Officer Of Vital Farms Sold 44% Of Their Shares

Some Vital Farms, Inc. (NASDAQ:VITL) shareholders may be a little concerned to see that the Chief Sales Officer, Peter Pappas, recently sold a substantial US$626k worth of stock at a price of US$39.92 per share. That's a big disposal, and it decreased their holding size by 44%, which is notable but not too bad.

View our latest analysis for Vital Farms

The Last 12 Months Of Insider Transactions At Vital Farms

In the last twelve months, the biggest single sale by an insider was when the Founder & Executive Chairman, Matthew O'Hayer, sold US$4.3m worth of shares at a price of US$21.62 per share. That means that even when the share price was below the current price of US$40.53, 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 2.6% of Matthew O'Hayer's stake.

Vital Farms insiders didn't buy any shares over the last year. 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!

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Insider Ownership Of Vital Farms

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Vital Farms insiders own 30% of the company, worth about US$513m. 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 Vital Farms Insider Transactions Indicate?

Insiders haven't bought Vital Farms stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But it is good to see that Vital Farms is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. At Simply Wall St, we found 2 warning signs for Vital Farms that deserve your attention before buying any shares.

But note: Vital Farms 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 of direct interests only, but not derivative transactions or indirect interests.

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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.