Some First Watch Restaurant Group, Inc. (NASDAQ:FWRG) shareholders may be a little concerned to see that the Independent Director, David Paresky, recently sold a substantial US$166m worth of stock at a price of US$23.99 per share. That sale reduced their total holding by 20% which is hardly insignificant, but far from the worst we've seen.
First Watch Restaurant Group Insider Transactions Over The Last Year
Notably, that recent sale by David Paresky is the biggest insider sale of First Watch Restaurant Group shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of US$24.54. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 20% of David Paresky's holding.
In the last year First Watch Restaurant Group insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Does First Watch Restaurant Group 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. 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 1.2% of First Watch Restaurant Group shares, worth about US$18m. 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 First Watch Restaurant Group Insiders?
Insiders haven't bought First Watch Restaurant Group stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But since First Watch Restaurant Group is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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. Every company has risks, and we've spotted 1 warning sign for First Watch Restaurant Group you should know about.
Of course First Watch Restaurant Group 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.