Insiders Of Sleep Number Reap Rewards After Their Investment Jumps Another US$256k

Sleep Number Corporation (NASDAQ:SNBR) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 11%, resulting in a US$32m rise in the company's market capitalisation, translating to a gain of 50% on their initial investment. As a result, their original purchase of US$510.1k worth of stock is now worth US$766.5k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Sleep Number

Sleep Number Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Stephen Macadam for US$485k worth of shares, at about US$9.70 per share. Even though the purchase was made at a significantly lower price than the recent price (US$14.60), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months Sleep Number insiders were buying shares, but not selling. 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!

Sleep Number is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership Of Sleep Number

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 4.6% of Sleep Number shares, worth about US$15m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Sleep Number Tell Us?

It doesn't really mean much that no insider has traded Sleep Number shares in the last quarter. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Sleep Number insiders are doubting the company, and they do own shares. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we've found that Sleep Number has 3 warning signs (2 shouldn't be ignored!) that deserve your attention before going any further with your analysis.

But note: Sleep Number 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.