Wayfair Insiders Made A Wise Decision By Selling US$3.6m Worth Of Stock

Despite a 20% gain in Wayfair Inc.'s (NYSE:W) stock price this week, shareholders shouldn't let up. In spite of the relatively cheap prices, insiders made the decision to sell US$3.6m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

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.

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The Last 12 Months Of Insider Transactions At Wayfair

The Chief Technology Officer, Fiona Tan, made the biggest insider sale in the last 12 months. That single transaction was for US$728k worth of shares at a price of US$47.62 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$67.86. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 8.7% of Fiona Tan's holding.

Wayfair insiders didn't buy any shares over the last year. 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!

View our latest analysis for Wayfair

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).

Insiders At Wayfair Have Sold Stock Recently

The last three months saw some Wayfair insider selling. Insiders divested only US$32k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the volume sold is so low that it really doesn't bother us.

Does Wayfair Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Wayfair insiders own 23% of the company, worth about US$1.9b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Wayfair Insiders?

While there has not been any insider buying in the last three months, there has been selling. But the sales were small, so we're not concerned. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Wayfair insider transactions don't fill us with confidence. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 2 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Wayfair.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.