Insiders At Sweetgreen Sold US$1.3m In Stock, Alluding To Potential Weakness

Sweetgreen, Inc. -0.09%

Sweetgreen, Inc.

SG

31.75

-0.09%

Sweetgreen, Inc. (NYSE:SG) shareholders might have a reason to worry after multiple insiders sold their shares over the last year. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Sweetgreen

The Last 12 Months Of Insider Transactions At Sweetgreen

Over the last year, we can see that the biggest insider sale was by the Chief Financial Officer, Mitch Reback, for US$199k worth of shares, at about US$13.90 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$11.15). So it is hard to draw any strong conclusion from it.

In the last year Sweetgreen insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NYSE:SG Insider Trading Volume January 30th 2024

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Sweetgreen Insiders Are Selling The Stock

The last three months saw significant insider selling at Sweetgreen. Specifically, insiders ditched US$178k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Sweetgreen insiders own about US$168m worth of shares (which is 14% 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.

So What Do The Sweetgreen Insider Transactions Indicate?

Insiders sold Sweetgreen shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 2 warning signs with Sweetgreen and understanding these should be part of your investment process.

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

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