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As Sleep Number Corporation's (NASDAQ:SNBR)) Market Cap Dropped by US$121m, Insiders Who Sold US$1.1m Worth of Stock Were Able to Offset Their Losses

Simply Wall St ·  {{timeTz}}

Insiders seem to have made the most of their holdings by selling US$1.1m worth of Sleep Number Corporation (NASDAQ:SNBR) stock at an average sell price of US$65.89 during the past year. The company's market valuation decreased by US$121m after the stock price dropped 12% over the past week, but insiders were spared from painful losses.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Sleep Number

Sleep Number Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Daniel Alegre, sold US$1.1m worth of shares at a price of US$65.89 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$41.07. So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Daniel Alegre.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volumeNasdaqGS:SNBR Insider Trading Volume September 20th 2022

I will like Sleep Number better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership Of Sleep Number

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 4.0% of Sleep Number shares, worth about US$36m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Sleep Number Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Still, the insider transactions at Sleep Number in the last 12 months are not very heartening. But we do like the fact that insiders own a fair chunk of the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for Sleep Number (of which 1 is concerning!) you should know about.

Of course Sleep Number 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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