Having purchased US$136m worth of Bed Bath & Beyond Inc. (NASDAQ:BBBY) stock, the recent 12% pullback is not what insiders may have expected

Insiders who acquired US$136m worth of Bed Bath & Beyond Inc.’s (NASDAQ:BBBY) stock at an average price of US$17.26 in the past 12 months may be dismayed by the recent 12% price decline. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$56m which is not ideal.

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.

See our latest analysis for Bed Bath & Beyond

The Last 12 Months Of Insider Transactions At Bed Bath & Beyond

In the last twelve months, the biggest single purchase by an insider was when insider Ryan Cohen bought US$134m worth of shares at a price of US$17.25 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$7.12). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it’s very important to consider the price insiders pay for 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$136m for 7.89m shares. But insiders sold 54.83k shares worth US$1.7m. Overall, Bed Bath & Beyond insiders were net buyers during the last year. 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!

insider trading volume
NasdaqGS:BBBY Insider Trading Volume June 12th 2022

Bed Bath & Beyond is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

inside ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It appears that Bed Bath & Beyond insiders own 12% of the company, worth about US$69m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Bed Bath & Beyond Insider Transactions Indicate?

It doesn’t really mean much that no insider has traded Bed Bath & Beyond shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in Bed Bath & Beyond and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. For example, Bed Bath & Beyond has 2 warning signs (and 1 which is significant) we think you should know about.

If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity 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, 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.

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