In the last year, multiple insiders have substantially increased their holdings of Grocery Outlet Holding Corp. (NASDAQ:GO) stock, indicating that insiders' optimism about the company's prospects has increased.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Our free stock report includes 3 warning signs investors should be aware of before investing in Grocery Outlet Holding. Read for free now.

Grocery Outlet Holding Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Lead Independent Director Erik Ragatz bought US$2.1m worth of shares at a price of US$20.91 per share. That means that an insider was happy to buy shares at above the current price of US$16.03. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. 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$7.0m for 439.00k shares. But they sold 122.96k shares for US$1.7m. In the last twelve months there was more buying than selling by Grocery Outlet Holding insiders. Their average price was about US$15.83. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. 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!

Check out our latest analysis for Grocery Outlet Holding

Grocery Outlet Holding 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.

Grocery Outlet Holding Insiders Bought Stock Recently

There has been significantly more insider buying, than selling, at Grocery Outlet Holding, over the last three months. In total, five insiders bought US$2.7m worth of shares in that time. On the other hand, insiders netted US$1.7m by selling. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Insider Ownership Of Grocery Outlet Holding

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Grocery Outlet Holding insiders own about US$65m worth of shares. That equates to 4.2% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Grocery Outlet Holding Tell Us?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Grocery Outlet Holding we think they are probably pretty confident of a bright future. While it's good to be aware of 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. Case in point: We've spotted 3 warning signs for Grocery Outlet Holding you should be aware of.

But note: Grocery Outlet Holding 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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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.