As SurgePays, Inc. (NASDAQ:SURG) gains 10%, insiders who bought last year may be wishing they had bet higher
Last week, SurgePays, Inc. (NASDAQ:SURG) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 10% last week, resulting in a US$3.5m increase in the company's market worth. In other words, the original US$270k purchase is now worth US$343k.
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 SurgePays
SurgePays Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Director David May for US$180k worth of shares, at about US$2.06 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$3.07. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
SurgePays insiders may have bought shares in the last year, but they didn't sell any. Their average price was about US$2.42. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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).
SurgePays Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at SurgePays. Not only was there no selling that we can see, but they collectively bought US$191k worth of shares. This is a positive in our book as it implies some confidence.
Insider Ownership
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. SurgePays insiders own about US$16m worth of shares (which is 43% of the company). 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 SurgePays Tell Us?
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. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about SurgePays. 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. When we did our research, we found 6 warning signs for SurgePays (4 don't sit too well with us!) that we believe deserve your full attention.
But note: SurgePays 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, 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.
