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Quite a few insiders invested in Potbelly Corporation (NASDAQ:PBPB) last year which is positive news for shareholders

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Potbelly Corporation's (NASDAQ:PBPB) case, it's fantastic news for shareholders.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Potbelly

The Last 12 Months Of Insider Transactions At Potbelly

Over the last year, we can see that the biggest insider purchase was by President Robert Wright for US$100k worth of shares, at about US$5.56 per share. Even though the purchase was made at a significantly lower price than the recent price (US$7.47), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

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Potbelly insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Potbelly Have Bought Stock Recently

It's good to see that Potbelly insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought US$60k worth of shares. This could be interpreted as suggesting a positive outlook.

Insider Ownership Of Potbelly

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that Potbelly insiders own 17% of the company, 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.

What Might The Insider Transactions At Potbelly Tell Us?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Potbelly we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Potbelly. At Simply Wall St, we found 1 warning sign for Potbelly that deserve your attention before buying any shares.

But note: Potbelly 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, 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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