GrowGeneration Corp. (NASDAQ:GRWG) insiders who sold US$29m worth of stock earlier this year are probably glad they did so as market cap slides to US$1.1b

By
Simply Wall St
Published
November 25, 2021
NasdaqCM:GRWG
Source: Shutterstock

Insiders at GrowGeneration Corp. (NASDAQ:GRWG) sold US$29m worth of stock at an average price of US$42.78 a share over the past year, making the most of their investment. After the stock price dropped 7.1% last week, the company's market value declined by US$83m, but insiders were able to mitigate their losses.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for GrowGeneration

GrowGeneration Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Co-Founder, Darren Lampert, sold US$8.2m worth of shares at a price of US$44.52 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$18.32. So it may not shed much light on insider confidence at current levels.

Insiders in GrowGeneration didn't buy any shares in the last year. 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!

insider-trading-volume
NasdaqCM:GRWG Insider Trading Volume November 26th 2021

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does GrowGeneration Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. GrowGeneration insiders own about US$49m worth of shares. That equates to 4.5% 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 GrowGeneration Insiders?

The fact that there have been no GrowGeneration insider transactions recently certainly doesn't bother us. Our analysis of GrowGeneration insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. 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. To that end, you should learn about the 3 warning signs we've spotted with GrowGeneration (including 1 which is concerning).

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.

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, but not derivative transactions.

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