In the last year, multiple insiders have substantially increased their holdings of Karat Packaging Inc. (NASDAQ:KRT) stock, indicating that insiders' optimism about the company's prospects has increased.
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.
Karat Packaging Insider Transactions Over The Last Year
In fact, the recent purchase by Alan Yu was the biggest purchase of Karat Packaging shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of US$14.00. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Over the last year, we can see that insiders have bought 57.45k shares worth US$805k. On the other hand they divested 36.13k shares, for US$677k. Overall, Karat Packaging insiders were net buyers during 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!
Karat Packaging is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Karat Packaging Insiders Bought Stock Recently
Over the last three months, we've seen significantly more insider buying, than insider selling, at Karat Packaging. In total, two insiders bought US$805k worth of shares in that time. But insiders only sold shares worth US$307k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Insider Ownership Of Karat Packaging
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Karat Packaging insiders own 71% of the company, currently worth about US$198m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Karat Packaging Tell Us?
It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Karat Packaging. That's what I like to see! Of course, the future is what matters most. So if you are interested in Karat Packaging, you should check out this free report on analyst forecasts for the company.
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, 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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