Don't Ignore The Fact That This Insider Just Sold Some Shares In Wrap Technologies, Inc. (NASDAQ:WRAP)

Some Wrap Technologies, Inc. (NASDAQ:WRAP) shareholders may be a little concerned to see that the Director, David Norris, recently sold a substantial US$2.0m worth of stock at a price of US$5.00 per share. That sale reduced their total holding by 22% which is hardly insignificant, but far from the worst we've seen.

See our latest analysis for Wrap Technologies

The Last 12 Months Of Insider Transactions At Wrap Technologies

Notably, that recent sale by David Norris is the biggest insider sale of Wrap Technologies shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of US$6.03. 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. 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 22%of David Norris's holding.

Over the last year we saw more insider selling of Wrap Technologies shares, than buying. The sellers received a price of around US$5.10, on average. It's not too encouraging to see that insiders have sold at below the current price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does Wrap Technologies Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Wrap Technologies insiders own about US$94m worth of shares (which is 42% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Wrap Technologies Insiders?

The stark truth for Wrap Technologies is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. For instance, we've identified 4 warning signs for Wrap Technologies (1 is significant) you should be aware of.

But note: Wrap 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.

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This article by Simply Wall St is general in nature. 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.
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