For CrowdStrike Holdings, Inc. (NASDAQ:CRWD) insiders, selling US$18m worth of stock earlier this year was a smart move.
Last week, CrowdStrike Holdings, Inc.'s (NASDAQ:CRWD) stock jumped 3.0%, but insiders who sold US$18m worth of stock in over the past year are likely to be in a better position. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of US$143, which is higher than the current price, may have been the best decision.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for CrowdStrike Holdings
CrowdStrike Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director Roxanne Austin bought US$3.4m worth of shares at a price of US$97.59 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$133. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Happily, we note that in the last year insiders paid US$7.4m for 75.58k shares. But insiders sold 126.43k shares worth US$18m. In total, CrowdStrike Holdings insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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CrowdStrike Holdings Insiders Bought Stock Recently
It's good to see that CrowdStrike Holdings insiders have made notable investments in the company's shares. We can see that Independent Director Roxanne Austin paid US$7.4m for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.
Does CrowdStrike Holdings Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. CrowdStrike Holdings insiders own 4.4% of the company, currently worth about US$1.4b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About CrowdStrike Holdings Insiders?
It's certainly positive to see the recent insider purchase. However, the longer term transactions are not so encouraging. The recent buying by an insider , along with high insider ownership, suggest that CrowdStrike Holdings insiders are fairly aligned, and optimistic. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for CrowdStrike Holdings that deserve your attention before buying any shares.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.
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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.
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