Favourable Signals For Wrap Technologies: Numerous Insiders Acquired Stock

Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Wrap Technologies, Inc. (NASDAQ:WRAP), that sends out a positive message to the company's shareholders.

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.

See our latest analysis for Wrap Technologies

Wrap Technologies Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Founder & Chairman Scot Cohen bought US$121k worth of shares at a price of US$2.12 per share. That means that even when the share price was higher than US$1.71 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Over the last year, we can see that insiders have bought 216.32k shares worth US$404k. But they sold 55.80k shares for US$117k. Overall, Wrap Technologies insiders were net buyers during the last year. Their average price was about US$1.87. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Wrap Technologies is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Wrap Technologies Insiders Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Wrap Technologies. Insiders purchased US$29k worth of shares in that period. We like it when there are only buyers, and no sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Does Wrap Technologies Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Wrap Technologies insiders own about US$22m worth of shares. That equates to 29% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Wrap Technologies Insiders?

Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Wrap Technologies 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. Be aware that Wrap Technologies is showing 4 warning signs in our investment analysis, and 1 of those shouldn't be ignored...

Of course Wrap Technologies may not be the best stock to buy. So you may wish to see this free collection of high quality 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, but not derivative transactions.

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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.