A number of insiders bought shares of Potbelly Corporation (NASDAQ:PBPB) last year, which is great news for shareholders.
When a single insider buys shares, it is usually not a major trade. However, when multiple insiders buy shares, as in Potbelly Corporation (NASDAQ:PBPB), this is good news for shareholders.
While we would never suggest that investors base their decisions solely on what a company’s directors have done, we would consider it foolish to completely ignore insider trading.
See our latest analysis for Potbelly
Potbelly insider trading over the past year
Notably, this recent buy by Robert Wright is the biggest insider buy of Potbelly stock we’ve seen in the last year. So clearly an insider wanted to buy, roughly at the current price, which is US$5.80. This means that they have been optimistic about the company in the past, although they may have changed their minds. We always like to see insider buying, but it’s worth noting if those buys were made well below the current stock price, as the discount to value may have diminished as the price rose. In this case, we are happy to report that insider buying was done at prices close to current prices.
Over the past twelve months, Potbelly insiders have been buying stocks, but not selling. You can see insider trading (by companies and individuals) over the past year illustrated in the table below. If you click on the chart, you can see all individual trades including stock price, individual and date!
Potbelly isn’t the only stock insiders are buying. So take a look at this free list of growing companies with insider buying.
Potbelly insiders bought stock recently
Over the past three months, we’ve seen significant insider buying at Potbelly. Not only was there no sale that we can see, but they collectively bought $130,000 worth of stock. This suggests that the company has good points.
Insider ownership
Many investors like to check how much a company is owned by insiders. I think it’s a good sign if insiders have a significant number of shares in the company. It appears Potbelly insiders own 18% of the company, worth around $30 million. This level of insider ownership is good, but just short of being particularly noteworthy. This certainly suggests a reasonable degree of alignment.
So what does this data suggest about Potbelly insiders?
Good to see recent purchases. We also rely on the longer-term picture of insider trading. However, we note that the company has not made a profit in the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest that Potbelly insiders are well aligned and may believe the stock price is too low. So, while it is useful to know what insiders are doing in terms of buying or selling, it is also useful to know the risks that a particular company faces. Every business has risks, and we’ve spotted 2 warning signs for Potbelly (of which 1 does not suit us too much!) that you should know.
Sure Potbelly may not be the best stock to buy. So you might want to see this free set of high quality companies.
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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