It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Wrap Technologies, Inc.’s (NASDAQ:WRAP) case, it’s fantastic news for shareholders.
Although we don’t think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Wrap Technologies
Wrap Technologies Insider Transactions Over The Last Year
The Founder & Director Scot Cohen made the biggest insider purchase in the last 12 months. That single transaction was for US$121k worth of shares at a price of US$2.12 each. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$1.24). 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. To us, it’s very important to consider the price insiders pay for shares. It is generally more encouraging if they are paid above the current price, as it suggests they saw value, even at higher levels.
Happily, we note that in the last year insiders paid US$375k for 189.02k shares. On the other hand they divested 55.80k shares, for US$117k. In total, Wrap Technologies insiders bought more than they sold over the last year. 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, individually and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders At Wrap Technologies Have Sold Stock Recently
Over the last three months, we’ve seen notably more insider selling, than insider buying, at Wrap Technologies. In total, insider James Barnes sold US$117k worth of shares in that time. On the flip side, insiders spent US$38k on purchasing shares. Since selling really does outweigh the buying, we’d say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.
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. It appears that Wrap Technologies insiders own 34% of the company, worth about US$17m. 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?
Unfortunately, there has been more insider selling of Wrap Technologies stock, than buying, in the last three months. But we take heart from prior transactions. And insiders do own shares. So we’re happy enough to look past some selling. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. Case in point: We’ve spotted 4 warning signs for Wrap Technologies you should be aware of, and 1 of these is significant.
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.
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