Insiders who placed huge bets on Yellow Corporation Inc (NASDAQ:YELL) earlier this year would be disappointed with the 14% drop
The recent price drop of 14% in yellow society (NASDAQ:YELL) The shares may have disappointed insiders who bought $1.8 million worth of shares at an average price of $6.70 over the past 12 months. Insiders invest in the hope that their money will increase in value over time. However, following recent losses, their initial investment is now only worth US$1.6 million, which is not what they expected.
While we don’t believe shareholders should simply follow insider trades, logic dictates that you pay attention to whether insiders are buying or selling shares.
Before examining these insider trades, please note that our analysis indicates that YELL is potentially overvalued!
Yellow insider trades over the past year
In the past twelve months, the largest single insider purchase was when Independent Chairman Matthew Doheny bought US$408,000 worth of stock at US$13.15 per share. This means that even when the stock price was above US$6.20 (the recent price), an insider wanted to buy some stock. It is very possible that they regret the purchase, but it is more likely that they are optimistic about the company. We always take careful note of the price paid by insiders when buying stocks. Generally, we are more positive about a stock if insiders bought the stock above current prices, as this suggests they viewed the stock as good value, even at a higher price.
Fortunately, we note that last year insiders paid $1.8 million for 263.59k shares. On the other hand, they sold 36.56k shares, for 273k USD. Overall, yellow insiders have been net buyers over the past year. Their average price was around US$6.70. These trades suggest that insiders found the current price attractive. You can see insider trading (by companies and individuals) over the past year illustrated in the table below. By clicking on the graph below, you will be able to see the precise detail of each insider trade!
Yellow isn’t the only security insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider buying, might be just the ticket.
Yellow insiders recently sold shares
Over the past three months, we have seen significantly more insider selling than insider buying at Yellow. Around this time, accounting manager James Faught sold US$273,000 worth of stock. On the other hand, we note that Independent Director Shaunna Jones purchased $4.3,000 worth of shares. Given that selling really outweighs buying, we would say these trades may suggest that some insiders believe the company has been fully valued in recent months.
For an ordinary shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely insiders will be incentivized to build the company for the long term. From our data, it appears Yellow insiders own 3.0% of the company, worth approximately $9.7 million. We generally prefer to see higher levels of insider ownership.
So what do yellow insider trades indicate?
Unfortunately, there have been more insider selling of Yellow shares than buying in the past three months. On the other hand, insider trading over the past year is encouraging. Yet insiders do not own a large portion of the shares. So overall, it’s hard to say insiders are optimistic. While we like to know what’s going on with insider ownership and trading, we also make sure to consider the risks a stock faces before making an investment decision. To do this, you need to find out about the 3 warning signs we spotted some with Yellow (including 2 that should not be overlooked).
If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of attractive companies, which have a high return on equity and low debt.
For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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