Insiders who purchased this year lose US$63k as NetApp, Inc. (NASDAQ:NTAP) stock drops to US$59.47
Insiders who bought US$360k worth of NetApp, Inc.'s (NASDAQ:NTAP) stock at an average buy price of US$72.04 over the last year may be disappointed by the recent 7.6% decrease in the stock. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$297k which is not ideal.
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.
See our latest analysis for NetApp
The Last 12 Months Of Insider Transactions At NetApp
Over the last year, we can see that the biggest insider purchase was by Executive VP & CFO Michael Berry for US$360k worth of shares, at about US$72.04 per share. That means that even when the share price was higher than US$59.47 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Michael Berry was the only individual insider to buy during 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders At NetApp Have Sold Stock Recently
The last quarter saw substantial insider selling of NetApp shares. In total, Independent Director Carrie Palin dumped US$174k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does NetApp 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. It appears that NetApp insiders own 0.3% of the company, worth about US$40m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About NetApp Insiders?
An insider sold stock recently, but they haven't been buying. In contrast, they appear keener if you look at the last twelve months. And insiders do own shares. So the recent selling doesn't worry us too much. While we like knowing 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. Every company has risks, and we've spotted 2 warning signs for NetApp (of which 1 shouldn't be ignored!) you should know about.
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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