Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Shoals Technologies Group, Inc. (NASDAQ:SHLS), that sends out a positive message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Shoals Technologies Group

Shoals Technologies Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Director & CEO Brandon Moss bought US$101k worth of shares at a price of US$4.55 per share. That means that an insider was happy to buy shares at around the current price of US$4.78. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Shoals Technologies Group insiders decided to buy shares at close to current prices.

Happily, we note that in the last year insiders paid US$172k for 37.30k shares. But they sold 16.77k shares for US$148k. Overall, Shoals Technologies Group 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!

Shoals Technologies Group 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.

Insiders At Shoals Technologies Group Have Bought Stock Recently

There has been significantly more insider buying, than selling, at Shoals Technologies Group, over the last three months. Insiders spent US$172k on shares. But we did see insider selling worth US$30k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Based on our data, Shoals Technologies Group insiders have about 0.4% of the stock, worth approximately US$3.4m. We consider this fairly low insider ownership.

So What Do The Shoals Technologies Group Insider Transactions Indicate?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Shoals Technologies Group stock. 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. In terms of investment risks, we've identified 2 warning signs with Shoals Technologies Group and understanding these should be part of your investment process.

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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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.