Chief Financial Officer Mohammad Saidal Mohmand Sold A Bunch Of Shares In Applied Digital

We wouldn't blame Applied Digital Corporation (NASDAQ:APLD) shareholders if they were a little worried about the fact that Mohammad Saidal Mohmand, the Chief Financial Officer recently netted about US$4.8m selling shares at an average price of US$34.73. Probably the most concerning element of the whole transaction is that the disposal amounted to 53% of their entire holding.

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Applied Digital Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chairman, Wesley Cummins, for US$6.1m worth of shares, at about US$15.26 per share. That means that even when the share price was below the current price of US$34.66, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 13% of Wesley Cummins's holding.

In the last year Applied Digital insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for Applied Digital

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Does Applied Digital 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. We usually like to see fairly high levels of insider ownership. It's great to see that Applied Digital insiders own 6.2% of the company, worth about US$598m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Applied Digital Tell Us?

Insiders haven't bought Applied Digital stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Applied Digital has 3 warning signs and it would be unwise to ignore these.

But note: Applied Digital may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 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.