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Looking at Where Food Comes From, Inc.'s (NASDAQ:WFCF ) insider transactions over the last year, we can see that insiders were net buyers. That is, there were more number of shares purchased by insiders than there were sold.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for Where Food Comes From
The Last 12 Months Of Insider Transactions At Where Food Comes From
Over the last year, we can see that the biggest insider purchase was by Independent Director Peter Lapaseotes for US$52k worth of shares, at about US$11.00 per share. We do like to see buying, but this purchase was made at well below the current price of US$12.54. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Peter Lapaseotes bought 5.25k shares over the last 12 months at an average price of US$11.18. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Where Food Comes From is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Does Where Food Comes From Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Where Food Comes From insiders own 50% of the company, worth about US$33m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Where Food Comes From Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Where Food Comes From insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Where Food Comes From has 1 warning sign and it would be unwise to ignore it.