Insiders who bought Sleep Number Corporation (NASDAQ:SNBR) in the last 12 months may probably not pay attention to the stock's recent 18% drop. After accounting for the recent loss, the US$510.1k worth of shares they purchased is now worth US$685.1k, suggesting a good return on their investment.
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.
Sleep Number Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Stephen Macadam for US$485k worth of shares, at about US$9.70 per share. Even though the purchase was made at a significantly lower price than the recent price (US$13.05), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
In the last twelve months Sleep Number insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Sleep Number is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Does Sleep Number Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Sleep Number insiders own 4.6% 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.
So What Does This Data Suggest About Sleep Number Insiders?
It doesn't really mean much that no insider has traded Sleep Number shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Sleep Number and their transactions don't cause us concern. 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. Every company has risks, and we've spotted 3 warning signs for Sleep Number (of which 2 are a bit unpleasant!) you should know about.
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.