The recent price decline of 16% in Shift Technologies, Inc.'s (NASDAQ:SFT) stock may have disappointed insiders who bought US$212k worth of shares at an average price of US$7.07 in the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$51k, which is not great.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Shift Technologies
In the last twelve months, the biggest single purchase by an insider was when Co-Founder George Arison bought US$71k worth of shares at a price of US$7.12 per share. That means that an insider was happy to buy shares at above the current price of US$1.71. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. We note that George Arison was both the biggest buyer and the biggest seller.
Over the last year, we can see that insiders have bought 30.01k shares worth US$212k. On the other hand they divested 8.00 shares, for US$57.1. In the last twelve months there was more buying than selling by Shift Technologies insiders. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does Shift Technologies Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, Shift Technologies insiders have about 3.2% of the stock, worth approximately US$4.5m. I generally like to see higher levels of ownership.
What Might The Insider Transactions At Shift Technologies Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Shift Technologies insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Shift Technologies. At Simply Wall St, we found 2 warning signs for Shift Technologies that deserve your attention before buying any shares.
But note: Shift Technologies 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, but not derivative transactions.
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.