FitLife Brands Insiders Benefit From Selling Stock At US$29.79

While it’s been a great week for FitLife Brands, Inc. (NASDAQ:FTLF) shareholders after stock gained 17%, company insiders might have missed out on those gains after selling stock earlier this year. They could have sold their shares at much higher prices and gotten a better return on their investment if they had waited.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for FitLife Brands

The Last 12 Months Of Insider Transactions At FitLife Brands

The Chief Retail Officer, Patrick Ryan, made the biggest insider sale in the last 12 months. That single transaction was for US$335k worth of shares at a price of US$32.80 each. That means that even when the share price was below the current price of US$35.00, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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. We note that the biggest single sale was 100% of Patrick Ryan's holding. Patrick Ryan was the only individual insider to sell shares in the last twelve months.

Patrick Ryan sold a total of 14.54k shares over the year at an average price of US$29.79. 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!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

FitLife Brands Insiders Are Selling The Stock

The last three months saw significant insider selling at FitLife Brands. Specifically, Chief Retail Officer Patrick Ryan ditched US$335k 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 FitLife Brands Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. FitLife Brands insiders own about US$18m worth of shares. That equates to 13% 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 FitLife Brands Insider Transactions Indicate?

An insider sold FitLife Brands shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But since FitLife Brands is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing FitLife Brands. Every company has risks, and we've spotted 4 warning signs for FitLife Brands (of which 1 can't be ignored!) you should know about.

Of course FitLife Brands 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com