GigaCloud Technology Inc.'s (NASDAQ:GCT) stock rose 23% last week, but insiders who sold US$15m worth of stock over the last year are probably in a more advantageous position. Selling at an average price of US$35.27, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At GigaCloud Technology
In the last twelve months, the biggest single sale by an insider was when the Chief Operationg officer, Xinyan Hao, sold US$13m worth of shares at a price of US$37.07 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$27.93). So it may not shed much light on insider confidence at current levels.
GigaCloud Technology insiders didn't buy any shares over the last year. 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!
I will like GigaCloud Technology better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insider Ownership Of GigaCloud Technology
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. GigaCloud Technology insiders own 26% of the company, currently worth about US$295m based on the recent share price. 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 GigaCloud Technology Insider Transactions Indicate?
The fact that there have been no GigaCloud Technology insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the GigaCloud Technology insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing GigaCloud Technology. While conducting our analysis, we found that GigaCloud Technology has 1 warning sign and it would be unwise to ignore it.
But note: GigaCloud Technology may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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 of direct interests only, but not derivative transactions or indirect interests.
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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.
