Don't Ignore The Insider Selling In BuzzFeed

Anyone interested in BuzzFeed, Inc. (NASDAQ:BZFD) should probably be aware that the Co-Founder, John Johnson, recently divested US$132k worth of shares in the company, at an average price of US$0.41 each. On the bright side, that sale was only 5.8% of their holding, so we doubt it's very meaningful, on its own.

See our latest analysis for BuzzFeed

The Last 12 Months Of Insider Transactions At BuzzFeed

In fact, the recent sale by John Johnson was the biggest sale of BuzzFeed shares made by an insider individual in the last twelve months, according to our records. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$0.37. So it is hard to draw any strong conclusion from it.

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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 12% of BuzzFeed shares, worth about US$6.4m, according to our data. However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About BuzzFeed Insiders?

An insider sold BuzzFeed shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. When you consider that most companies have higher levels of insider ownership, we're a little wary. We'd certainly practice some caution before buying! 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 5 warning signs for BuzzFeed that deserve your attention before buying any shares.

But note: BuzzFeed 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.