Want to participate in a short research study? Help shape the future of investing tools and receive a $20 prize!
We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Big 5 Sporting Goods Corporation (NASDAQ:BGFV).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
The Last 12 Months Of Insider Transactions At Big 5 Sporting Goods
Over the last year, we can see that the biggest insider purchase was by Lead Independent Director Van Honeycutt for US$210k worth of shares, at about US$6.78 per share. That means that an insider was happy to buy shares at above the current price. Their view may have changed since then, but at least it shows they felt optimistic at the time. That purchase may suggest an expectation of positive returns over the long term. Van Honeycutt was the only individual insider to buy shares in the last twelve months.
Van Honeycutt bought a total of 74.00k shares over the year at an average price of US$6.40. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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. Our data indicates that Big 5 Sporting Goods insiders own about US$4.5m worth of shares (which is 5.4% of the company). We do generally prefer see higher levels of insider ownership.
What Might The Insider Transactions At Big 5 Sporting Goods Tell Us?
The fact that there have been no Big 5 Sporting Goods insider transactions recently certainly doesn’t bother us. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we’d be more comfortable if they owned more Big 5 Sporting Goods stock. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Big 5 Sporting Goods.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.