Yahoo Finance Possible turnaround for Wayfair Inc. (NYSE:W) insiders, still down US$463k after a US$1.7m shopping spree
Insiders who purchased US$1.7m worth of Wayfair Inc. (NYSE:W) shares over the past year recouped some of their losses after price gained 4.3% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$463k.
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.
Check out our latest analysis for Wayfair
Wayfair Insider Transactions Over The Last Year
The Independent Director Michael Choe made the biggest insider purchase in the last 12 months. That single transaction was for US$1.7m worth of shares at a price of US$49.86 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$36.64). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Michael Choe was the only individual insider to buy shares in the last twelve months.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Wayfair 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.
Wayfair Insiders Are Selling The Stock
Over the last three months, we've seen a bit of insider selling at Wayfair. Independent Director Anke Schaferkordt only netted US$44k selling shares, in that period. It's not great to see insider selling, nor the lack of recent buyers. But the selling simply isn't sufficiently substantial to be of much use as a signal.
Insider Ownership Of Wayfair
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Wayfair insiders own about US$1.1b worth of shares (which is 27% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Wayfair Insider Transactions Indicate?
We did not see any insider buying in the last three months, but we did see selling. But given the selling was modest, we're not worried. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Wayfair insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Wayfair. Case in point: We've spotted 4 warning signs for Wayfair you should be aware of, and 1 of these makes us a bit uncomfortable.
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.
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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.
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