Last week, Sleep Number Corporation (NASDAQ:SNBR) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 32% last week, resulting in a US$80m increase in the company's market worth, implying a 54% gain on their initial purchase. As a result, the stock they originally bought for US$510.1k is now worth US$786.5k.
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.
See our latest analysis for Sleep Number
The Last 12 Months Of Insider Transactions At Sleep Number
The insider Stephen Macadam made the biggest insider purchase in the last 12 months. That single transaction was for US$485k worth of shares at a price of US$9.70 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$14.98. 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.
In the last twelve months insiders purchased 52.50k shares for US$510k. But insiders sold 2.49k shares worth US$93k. In the last twelve months there was more buying than selling by Sleep Number insiders. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders At Sleep Number Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Sleep Number. In total, insiders bought US$510k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
Insider Ownership
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. Insiders own 4.9% of Sleep Number shares, worth about US$16m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Sleep Number Insider Transactions Indicate?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Sleep Number insiders are well aligned, and that they may think the share price is too low. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To that end, you should learn about the 4 warning signs we've spotted with Sleep Number (including 2 which are significant).
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 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.