When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Wolverine World Wide, Inc.'s (NYSE:WWW) instance, it's good news for shareholders.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for Wolverine World Wide
The Last 12 Months Of Insider Transactions At Wolverine World Wide
Over the last year, we can see that the biggest insider purchase was by Independent Chairman & Lead Independent Director Nicholas Long for US$161k worth of shares, at about US$16.13 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$9.16). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Happily, we note that in the last year insiders paid US$222k for 17.30k shares. On the other hand they divested 3.05k shares, for US$42k. In total, Wolverine World Wide insiders bought more than they sold over the last year. The average buy price was around US$12.81. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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.
Insider Ownership Of Wolverine World Wide
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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 2.9% of Wolverine World Wide shares, worth about US$21m. 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 Wolverine World Wide Tell Us?
It doesn't really mean much that no insider has traded Wolverine World Wide shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Wolverine World Wide and their transactions don't cause us concern. 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. For instance, we've identified 2 warning signs for Wolverine World Wide (1 is concerning) you should be aware of.
Of course Wolverine World Wide 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.