Owlet Insider Stock Sales Prove Timely As Market Valuation Descends To US$139m

Over the past year, insiders sold US$168k worth of Owlet, Inc. (NYSE:OWLT) stock at an average price of US$4.27 per share allowing them to get the most out of their money. After the stock price dropped 14% last week, the company's market value declined by US$21m, but insiders were able to mitigate their losses.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Owlet

In the last twelve months, the biggest single sale by an insider was when the President, Jonathan Harris, sold US$106k worth of shares at a price of US$4.45 per share. That means that an insider was selling shares at slightly below the current price (US$8.12). 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. 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. It is worth noting that this sale was only 32% of Jonathan Harris's holding.

In the last year Owlet 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!

View our latest analysis for Owlet

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Insiders At Owlet Have Sold Stock Recently

The last quarter saw substantial insider selling of Owlet shares. In total, President Jonathan Harris dumped US$57k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Owlet Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that Owlet insiders own 8.0% of the company, worth about US$11m. 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 Does This Data Suggest About Owlet Insiders?

An insider hasn't bought Owlet 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. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Owlet. In terms of investment risks, we've identified 2 warning signs with Owlet and understanding these should be part of your investment process.

Of course Owlet 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 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.