Yahoo Finance Insiders See US$1.2m Investment In Karat Packaging Jump Last Week \
Karat Packaging Inc. (NASDAQ:KRT) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 10%, resulting in a US$30m rise in the company's market capitalisation. In other words, the original US$1.2m purchase is now worth US$1.3m.
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.
Check out our latest analysis for Karat Packaging
Karat Packaging Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Chairman & CEO Alan Yu for US$673k worth of shares, at about US$14.37 per share. So it's clear an insider wanted to buy, at around the current price, which is US$15.75. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Karat Packaging share holders is that insiders were buying at near the current price.
Happily, we note that in the last year insiders paid US$1.2m for 82.85k shares. But they sold 26.13k shares for US$472k. In total, Karat Packaging insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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).
Does Karat Packaging Boast High Insider 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Karat Packaging insiders own 72% of the company, currently worth about US$224m 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.
What Might The Insider Transactions At Karat Packaging Tell Us?
It doesn't really mean much that no insider has traded Karat Packaging shares in the last quarter. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, Karat Packaging insiders feel good about the company's future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Karat Packaging 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.
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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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