Some Bed Bath & Beyond Inc. (NASDAQ:BBBY) shareholders may be a little concerned to see that insider Ryan Cohen recently sold a substantial US$106m worth of stock at a price of US$21.17 per share. Probably the most concerning element of the whole transaction is that the disposal amounted to 64% of their entire holding.
However if you’d rather see where the opportunities and risks are within BBBY’s industry, you can check out our analysis on the US Specialty Retail industry.
Bed Bath & Beyond Insider Transactions Over The Last Year
In fact, the recent sale by insider Ryan Cohen was not their only trade of Bed Bath & Beyond shares this year. They previously purchased US$134m worth of shares at a price of US$17.25 per share. That means that even when the share price was higher than US$10.36 (the recent price), an insider wanted to purchase shares. 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. We note that Ryan Cohen was also the biggest seller.
Happily, we note that in the last year insiders paid US$136m for 7.95m shares. On the other hand they divested 7.78m shares, for US$178m. Ryan Cohen ditched 7.78m shares over the year. The average price per share was US$22.88. 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership Of Bed Bath & Beyond
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 3.0% of Bed Bath & Beyond shares, worth about US$25m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Bed Bath & Beyond Insider Transactions Indicate?
The stark truth for Bed Bath & Beyond is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn’t give us much comfort. While insiders do own shares, they don’t own a heap, and they have been selling. So we’d only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. When we did our research, we found 3 warning signs for Bed Bath & Beyond (2 can’t be ignored!) that we believe deserve your full attention.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, 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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