Shareholders Can't Ignore US$8.3m Of Sales By System1 Insiders

Last week, System1, Inc.'s (NYSE:SST) stock jumped 36%, but insiders who sold US$8.3m worth of stock in over the past year are likely to be in a better position. Selling at an average price of US$1.50, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for System1

System1 Insider Transactions Over The Last Year

The CEO & Chairman, Michael Blend, made the biggest insider sale in the last 12 months. That single transaction was for US$7.2m worth of shares at a price of US$1.50 each. 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$0.84. So it is hard to draw any strong conclusion from it. Michael Blend was the only individual insider to sell over the last year.

Michael Blend sold a total of 5.50m shares over the year at an average price of US$1.50. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Does System1 Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. System1 insiders own about US$21m worth of shares. That equates to 25% 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 Does This Data Suggest About System1 Insiders?

It doesn't really mean much that no insider has traded System1 shares in the last quarter. Our analysis of System1 insider transactions leaves us cautious. But it's good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing System1. Our analysis shows 3 warning signs for System1 (1 makes us a bit uncomfortable!) and we strongly recommend you look at them before investing.

Of course System1 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.

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

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.