Insiders Made Right Decision To Sell As ContextLogic Dips 12%

Insiders at ContextLogic Inc. (NASDAQ:LOGC) sold US$512k worth of stock at an average price of US$5.85 a share over the past year, making the most of their investment. The company's market valuation decreased by US$26m after the stock price dropped 12% over the past week, but insiders were spared from painful losses.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for ContextLogic

The Last 12 Months Of Insider Transactions At ContextLogic

In the last twelve months, the biggest single sale by an insider was when the insider, Mauricio Monico, sold US$336k worth of shares at a price of US$6.10 per share. That means that an insider was selling shares at slightly below the current price (US$7.02). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 100% of Mauricio Monico's stake.

ContextLogic insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that ContextLogic insiders own 3.5% of the company, worth about US$6.3m. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At ContextLogic Tell Us?

The fact that there have been no ContextLogic insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by ContextLogic insiders. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that ContextLogic has 1 warning sign and it would be unwise to ignore it.

But note: ContextLogic 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.