The recent 11% drop in United Natural Foods, Inc.'s (NYSE:UNFI) stock could come as a blow to insiders who purchased US$300.4k worth of stock at an average buy price of US$13.04 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$244.6k, which is not great.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At United Natural Foods
Over the last year, we can see that the biggest insider sale was by the insider, Ann Bates, for US$240k worth of shares, at about US$14.94 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$10.62). So it may not tell us anything about how insiders feel about the current share price.
Happily, we note that in the last year insiders paid US$300k for 23.03k shares. But they sold 20.44k shares for US$290k. Overall, United Natural Foods insiders were net buyers during the last year. 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 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 United Natural Foods Have Bought Stock Recently
Over the last three months, we've seen a bit of insider buying at United Natural Foods. In that period Chief Financial Officer John Howard spent US$75k on shares. However, Chief Accounting Officer & Controller Richard Esper netted US$50k for sales. While it's good to see the insider buying, the net amount bought isn't enough for us to gain much confidence from it.
Insider Ownership
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 United Natural Foods insiders own 2.1% of the company, worth about US$14m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At United Natural Foods Tell Us?
We note a that there has been a bit of insider buying recently (but no selling). Overall the buying isn't worth writing home about. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in United Natural Foods 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. At Simply Wall St, we found 1 warning sign for United Natural Foods that deserve your attention before buying any shares.
Of course United Natural Foods 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.