We wouldn't blame Vital Farms, Inc. (NASDAQ:VITL) shareholders if they were a little worried about the fact that Peter Pappas, the Chief Sales Officer recently netted about US$626k selling shares at an average price of US$39.92. That sale reduced their total holding by 44% which is hardly insignificant, but far from the worst we've seen.

The Last 12 Months Of Insider Transactions At Vital Farms

Over the last year, we can see that the biggest insider sale was by the Founder & Executive Chairman, Matthew O'Hayer, for US$4.3m worth of shares, at about US$21.62 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$40.53. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 2.6% of Matthew O'Hayer's holding.

In the last year Vital Farms insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Vital Farms insiders own 30% of the company, currently worth about US$513m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Vital Farms Tell Us?

Insiders sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. But since Vital Farms is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Vital Farms. While conducting our analysis, we found that Vital Farms has 2 warning signs and it would be unwise to ignore these.

Of course Vital Farms 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 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.