Nasdaq-Listed Companies

Waitr Holdings Inc. (NASDAQ:WTRH) is up 80%, but insiders still continue to see a loss of US$377k on their US$781k investment

Insiders who bought US$781k worth of Waitr Holdings Inc. (NASDAQ:WTRH) stock in the last year have seen some of their losses recouped as the stock gained 80% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$377k since the time of purchase.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

The Last 12 Months Of Insider Transactions At Waitr Holdings

Over the last year, we can see that the biggest insider purchase was by Independent Director Buford Ortale for US$732k worth of shares, at about US$2.75 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$1.44). 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. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Happily, we note that in the last year insiders paid US$781k for 281.11k shares. But insiders sold 200.00k shares worth US$233k. Overall, Waitr Holdings insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volumeNasdaqGS:WTRH Insider Trading Volume October 20th 2021

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Waitr Holdings Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Waitr Holdings shares. In total, Director Steven Scheinthal sold US$233k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership of Waitr Holdings

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 11% of Waitr Holdings shares, worth about US$19m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Waitr Holdings Insider Transactions Indicate?

An insider sold Waitr Holdings shares recently, but they didn't buy any. In contrast, they appear keener if you look at the last twelve months. We like that insiders own a fair amount of the company. So the recent selling doesn't worry us too much. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Waitr Holdings has 5 warning signs (and 1 which can't be ignored) we think you should know about.

Of course Waitr Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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