As Bread Financial Holdings, Inc. (NYSE:BFH) drops to US$1.9b market cap, insiders might
The recent price decline of 4.0% in Bread Financial Holdings, Inc.’s (NYSE:BFH) stock may have disappointed insiders who bought US$774k worth of shares at an average price of US$39.04 in the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$757k, which is not what they expected.
Although we don’t think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Our analysis indicates that BFH is potentially undervalued!
Bread Financial Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director John Gerspach bought US$193k worth of shares at a price of US$38.54 per share. That means that an insider was happy to buy shares at above the current price of US$38.19. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. 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.
Bread Financial Holdings insiders may have bought shares in the last year, but they didn’t sell any. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Bread Financial Holdings 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.
Does Bread Financial Holdings Boast High 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. From our data, it seems that Bread Financial Holdings insiders own 0.3% of the company, worth about US$6.5m. Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
What Might The Insider Transactions At Bread Financial Holdings Tell Us?
It doesn’t really mean much that no insider has traded Bread Financial Holdings shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we’d be more comfortable if they owned more Bread Financial Holdings stock. 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. For example – Bread Financial Holdings has 3 warning signs we think you should be aware of.
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, but not derivative transactions.
Valuation is complex, but we’re helping make it simple.
Find out whether Bread Financial Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.