Multiple insiders secured a larger position in Overstock.com, Inc. (NASDAQ:OSTK) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Overstock.com

Overstock.com Insider Transactions Over The Last Year

In fact, the recent purchase by Marcus Lemonis was the biggest purchase of Overstock.com 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$16.72. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Happily, we note that in the last year insiders paid US$2.1m for 123.05k shares. On the other hand they divested 4.50k shares, for US$125k. Overall, Overstock.com insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Overstock.com is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders At Overstock.com Have Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at Overstock.com. Insiders spent US$1.8m on shares. But we did see Chief Technology Officer Joel Weight sell shares worth US$91k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Overstock.com insiders own 1.5% of the company, worth about US$11m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Overstock.com Insider Transactions Indicate?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Overstock.com insiders are well aligned, and that they may think the share price is too low. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. You'd be interested to know, that we found 2 warning signs for Overstock.com and we suggest you have a look.

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 of direct interests only, but not derivative transactions or indirect interests.

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