Over the past year, many Sprouts Farmers Market, Inc. (NASDAQ:SFM) insiders sold a significant stake in the company which may have piqued investors' interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Sprouts Farmers Market Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the CEO & Director, Jack Sinclair, sold US$6.9m worth of shares at a price of US$137 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$173. 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. This single sale was just 24% of Jack Sinclair's stake.
In the last year Sprouts Farmers Market insiders didn't buy any company stock. 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!
See our latest analysis for Sprouts Farmers Market
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Insiders At Sprouts Farmers Market Have Sold Stock Recently
The last three months saw significant insider selling at Sprouts Farmers Market. In total, insiders sold US$3.7m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Insider Ownership Of Sprouts Farmers Market
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Insiders own 0.4% of Sprouts Farmers Market shares, worth about US$75m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Sprouts Farmers Market Tell Us?
Insiders haven't bought Sprouts Farmers Market stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But since Sprouts Farmers Market is profitable and growing, we're not too worried by this. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Sprouts Farmers Market. At Simply Wall St, we found 1 warning sign for Sprouts Farmers Market that deserve your attention before buying any shares.
But note: Sprouts Farmers Market 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 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.