Charlotte's Web stock is currently selling for $14.90, up 4% at the time of writing. Charlotte's Web Holdings (TSX:CWEB) (OTCQX:CWBHF) has had a volatile month; shares climbed to highs of $18.07 USD from $13.67 USD in early July but corrected most of those gains across the month.
The entire cannabis sector has faced a lull, bear in mind, since the end of April. So it is likely that Charlotte's Web stock is suffering the knock-on effect from this. But there is another reason investors could be concerned about this pure-play CBD stock—is insider-selling affecting stock price?
Charlotte's Web Stock
The last quarter saw insiders sell a total of $26 million US worth of shares. During the same period, there were no purchases.
Investors may see this as a red flag. Selling can indicate a few possibilities. Of course, it can simply be profit-taking. But it can also indicate that insiders believe the stock has peaked—at least in the short term.
The latter is a worrisome prospect for investors of Charlotte's Web stock.
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However, overall stock numbers held by insiders is an important indicator for investors, and in Charlotte's Web Holdings' case, the company still has a significant number of shares held by insiders. According to SimplyWallStreet, "insiders own 9.2% of the company, worth about $180 million CAD."
A high level of insider ownership also means that those running the company have as much at stake personally as outstanding shareholders. This effectively means that management is likely thinking about the best interests of shareholders.
The Takeaway
While insiders have sold $26 million USD worth of shares, there remains a large percentage still held. In the last three months, nobody has bought, however; is this simply ill-timing? The sector going through a lull would surely be an opportune time to buy, so for this reason, investors should research carefully before doing anything.
At the end of the day, though, Charlotte's Web stock remains an analyst favorite, and the company is still profitable and growing.
What are your thoughts on this? Would you be concerned?
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