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Insiders may be rethinking their US$711k Katapult Holdings, Inc. (NASDAQ:KPLT) investment now that the company has lost US$46m in value

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The recent 14% drop in Katapult Holdings, Inc.'s (NASDAQ:KPLT) stock could come as a blow to insiders who purchased US$711k worth of stock at an average buy price of US$3.71 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$556k, which is not what they expected.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Katapult Holdings

Katapult Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Chairman of the Board Brian Hirsch bought US$185k worth of shares at a price of US$3.08 per share. That means that an insider was happy to buy shares at above the current price of US$2.90. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months insiders purchased 191.75k shares for US$711k. On the other hand they divested 38.50k shares, for US$147k. In total, Katapult Holdings insiders bought more than they sold over the last year. The average buy price was around US$3.71. These transactions suggest that insiders have considered the current price attractive. 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!

insider-trading-volume
insider-trading-volume

Katapult Holdings is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders at Katapult Holdings Have Bought Stock Recently

We saw some Katapult Holdings insider buying shares in the last three months. Independent Chairman of the Board Brian Hirsch bought US$185k worth of shares in that time. On the other hand, Chief Credit Officer Fangqiu Sun sold US$147k worth of shares. It is good to see that insiders have been buying, but they did not buy very many shares, in the scheme of things.

Does Katapult Holdings Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Katapult Holdings insiders own about US$13m worth of shares. That equates to 4.8% of the company. 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 Katapult Holdings Tell Us?

Our data shows a little insider buying, but no selling, in the last three months. That said, the purchases were not large. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Katapult Holdings insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Katapult Holdings has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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