Insiders who purchased US$989k worth of Purple Innovation, Inc. (NASDAQ:PRPL) shares over the past year recouped some of their losses after price gained 11% last week. However, total losses seen by insiders are still US$505k but in since the time of purchase.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Purple Innovation Insider Transactions Over The Last Year
The Chief Legal Officer & Secretary Casey McGarvey made the biggest insider purchase in the last 12 months. That single transaction was for US$500k worth of shares at a price of US$10.48 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$3.94). 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months Purple Innovation insiders were buying shares, but not selling. They paid about US$8.05 on average. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Purple Innovation 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.
Insiders at Purple Innovation Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Purple Innovation. In total, insiders bought US$75k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Based on our data, Purple Innovation insiders have about 0.7% of the stock, worth approximately US$2.3m. We consider this fairly low insider ownership.
So What Do The Purple Innovation Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Purple Innovation insiders are reasonably well aligned, and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 3 warning signs with Purple Innovation and understanding these should be part of your investment process.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.