We wouldn't blame Sovos Brands, Inc. (NASDAQ:SOVO) shareholders if they were a little worried about the fact that Neha Mathur, the Independent Director recently netted about US$114m selling shares at an average price of US$13.37. That sale reduced their total holding by 13% which is hardly insignificant, but far from the worst we've seen.
The Last 12 Months Of Insider Transactions At Sovos Brands
In fact, the recent sale by Neha Mathur was the biggest sale of Sovos Brands shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was below the current price of US$14.35, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 13%of Neha Mathur's holding.
Insiders in Sovos Brands didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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Insider Ownership Of Sovos Brands
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Sovos Brands insiders own about US$131m worth of shares (which is 9.1% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Sovos Brands Insider Transactions Indicate?
Insiders sold Sovos Brands shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. It is good to see high insider ownership, but the insider selling leaves us cautious. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 1 warning sign for Sovos Brands you should be aware of.
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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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