Insiders who bought US$162k worth of Grove Collaborative Holdings, Inc. (NYSE:GROV) stock in the last year recovered part of their losses as the stock rose by 30% last week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at US$36k since the time of purchase.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Grove Collaborative Holdings

Grove Collaborative Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Director John Replogle for US$103k worth of shares, at about US$0.83 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$0.56). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months Grove Collaborative Holdings insiders were buying shares, but not selling. Their average price was about US$0.72. 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!

Grove Collaborative Holdings 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.

Grove Collaborative Holdings Insiders Bought Stock Recently

It's good to see that Grove Collaborative Holdings insiders have made notable investments in the company's shares. In total, insiders bought US$162k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

Does Grove Collaborative Holdings Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own US$3.3m worth of Grove Collaborative Holdings stock, about 3.0% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. We prefer to see high levels of insider ownership.

What Might The Insider Transactions At Grove Collaborative Holdings Tell Us?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Grove Collaborative Holdings insiders are reasonably well aligned, and optimistic for the future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To that end, you should learn about the 4 warning signs we've spotted with Grove Collaborative Holdings (including 2 which are significant).

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.

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