It’s not uncommon for companies to do well in the years after insiders have bought stocks. The downside of this is that there aren’t just a few examples of insiders dumping stocks before a period of poor performance. So we’re going to look to see if insiders bought or sold stocks of Big 5 Sporting Goods Corporation (NASDAQ: BGFV).
What is Insider buying?
It is quite normal for company insiders, such as board members, to trade in company stocks from time to time. However, such insiders are required to disclose their trading activities and are not allowed to trade inside information.
We would never suggest that investors base their decisions solely on what a company’s directors have done. However, it makes perfect sense to keep an eye on insider activity. As Peter Lynch said, “Insiders could sell their stocks for a number of reasons, but they are buying them for only one thing: they think the price will go up”.
Check out our latest analysis for Big 5 Sporting Goods
The last 12 months of insider trading on Big 5 Sporting Goods
In fact, the latest Barry Emerson sale was, on our records, the largest sale of Big 5 Sporting Goods stock any insider person has made in the past twelve months. So it’s clear that an insider wanted to take some cash off the table, even below the current price of $ 16.47. If an insider sells below the current price, it indicates that they consider that lower price to be fair. That makes us wonder what you think of the (higher) recent rating. While insider selling is not a positive sign, we cannot be sure if it means that insiders believe the stocks are fully valued, so this is only a weak sign. That single sale made up only 34% of Barry Emerson’s shares.
In the past year, Big 5 Sporting Goods Insiders haven’t bought any company shares. Below is a visual representation of insider trades (by companies and individuals) over the past 12 months. Click on the graphic below to see the exact details of each Insider Transaction!
NasdaqGS: BGFV Insider Trading Volume March 23, 2021
If you’re looking to buy stocks that insiders are buying instead of selling, then you might love this free List of companies. (Note: Insiders bought them).
Big 5 Sporting Goods insiders recently sold inventory
In the past three months, we’ve seen significant inside sales on Big 5 Sporting Goods. Insiders in particular have dropped $ 365,000 worth of shares during that time, and we have not booked any purchases. This could suggest that some insiders think the stocks aren’t cheap.
Does Big 5 sporting goods have high inside ownership?
Another way to test alignment between a company’s executives and other shareholders is to see how many stocks they own. The higher the proportion of insiders, the more likely it is that insiders will receive incentives to build the company over the long term. Big 5 Sporting Goods Insider owns approximately $ 21 million in shares. That corresponds to 5.9% of the company. We have certainly seen higher levels of insider ownership elsewhere, but these levels are sufficient to suggest an alignment between insiders and the other shareholders.
What do the Big 5 Sporting Goods Insider Transactions mean?
Insiders recently sold Big 5 Sporting Goods shares but didn’t buy any. And in the past year there have been no purchases to comfort us. But since Big 5 Sporting Goods is profitable and growing, we don’t worry too much about that. While insiders own stocks, they don’t own a bunch and have sold. We are in no rush to buy! While it is helpful to know what insiders are doing to buy or sell, it is also helpful to know the risks a particular company is facing. You’d be interested to know that we’ve found 3 warning signs for Big 5 sporting goods and we suggest you take a look.
But note: Big 5 Sporting Goods may not be the best stock to buy. So take a look at it free List of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are persons who report their transactions to the competent supervisory authority. We currently consider open market transactions and private sales, but not derivative transactions.
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This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. We want to provide you with a long-term, focused analysis based on fundamental data. Note that our analysis may not take into account the latest price sensitive company announcements or quality materials. Simply Wall St has no position in the stocks mentioned.
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