Despite the fact that Sunrun Inc. (NASDAQ:RUN) stock rose 16% last week, insiders who sold US$3.2m worth of stock in the previous 12 months are likely to be better off. Selling at an average price of US$12.93, 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.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Sunrun Insider Transactions Over The Last Year
The Independent Director, Katherine August-deWilde, made the biggest insider sale in the last 12 months. That single transaction was for US$324k worth of shares at a price of US$13.74 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$10.75. So it may not shed much light on insider confidence at current levels.
Over the last year we saw more insider selling of Sunrun shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Sunrun 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.
Sunrun Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Sunrun. Specifically, insiders ditched US$285k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership Of Sunrun
For a common shareholder, it is worth checking how many shares are held by company 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. It appears that Sunrun insiders own 2.3% of the company, worth about US$59m. 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 Does This Data Suggest About Sunrun Insiders?
Insiders haven't bought Sunrun stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Sunrun. Be aware that Sunrun is showing 4 warning signs in our investment analysis, and 1 of those can't be ignored...
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.
