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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of The ONE Group Hospitality, Inc. (NASDAQ:STKS), it sends a favourable message to the company's shareholders.
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 ONE Group Hospitality
ONE Group Hospitality Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Director Eugene Bullis for US$100k worth of shares, at about US$5.26 per share. That means that even when the share price was higher than US$3.41 (the recent price), an insider wanted to purchase shares. 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. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
ONE Group Hospitality insiders may have bought shares in the last year, but they didn't sell any. They paid about US$4.23 on average. These transactions suggest that insiders have considered the current price attractive. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insiders At ONE Group Hospitality Have Bought Stock Recently
There was some insider buying at ONE Group Hospitality over the last quarter. Executive Chairman & Director of Business Development Jonathan Segal purchased US$40k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Does ONE Group Hospitality Boast High Insider Ownership?
Many investors like to check how much of a company is owned by 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. ONE Group Hospitality insiders own about US$21m worth of shares. That equates to 20% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.