It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Hibbett Sports, Inc. (NASDAQ:HIBB).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.
Hibbett Sports Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Senior VP & Chief Information Officer Ronald Blahnik for US$97k worth of shares, at about US$15.84 per share. We do like to see buying, but this purchase was made at well below the current price of US$22.49. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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.
Insiders at Hibbett Sports Have Bought Stock Recently
At Hibbett Sports,over the last quarter, we have observed quite a lot more insider buying than insider selling. Senior VP & Chief Information Officer Ronald Blahnik spent US$97k on stock. But Senior Vice President of Operations Cathy Pryor sold shares worth US$28k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Does Hibbett Sports Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own US$4.7m worth of Hibbett Sports stock, about 1.2% of the company. We prefer to see high levels of insider ownership.
So What Does This Data Suggest About Hibbett Sports Insiders?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Hibbett Sports insiders are reasonably well aligned, and optimistic for the future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Hibbett Sports.
But note: Hibbett Sports may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.
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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.