BuzzFeed Insiders US$70m Short Of Breakeven On Stock Purchase
Insiders who purchased US$120.1m worth of BuzzFeed, Inc. (NASDAQ:BZFD) shares over the past year recouped some of their losses after price gained 12% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$70m since the time of purchase.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At BuzzFeed
Over the last year, we can see that the biggest insider purchase was by insider Byron Folks for US$120m worth of shares, at about US$3.00 per share. That means that even when the share price was higher than US$1.24 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 40.09m shares for US$120m. But they sold 3.42m shares for US$5.5m. Overall, BuzzFeed 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!
Check out our latest analysis for BuzzFeed
BuzzFeed is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
BuzzFeed Insiders Bought Stock Recently
It's good to see that BuzzFeed insiders have made notable investments in the company's shares. Overall, four insiders shelled out US$127k for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. BuzzFeed insiders own about US$57m worth of shares (which is 61% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The BuzzFeed Insider Transactions Indicate?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about BuzzFeed. Looks promising! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To that end, you should learn about the 4 warning signs we've spotted with BuzzFeed (including 3 which are potentially serious).
But note: BuzzFeed 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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