Trade Alert: Independent Chairman of the Board Of NetApp Thomas Nevens Has Sold Stock

Some NetApp, Inc. (NASDAQ:NTAP) shareholders may be a little concerned to see that the Independent Chairman of the Board, Thomas Nevens, recently sold a substantial US$1.2m worth of stock at a price of US$195 per share. That sale reduced their total holding by 43% which is hardly insignificant, but far from the worst we've seen.

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The Last 12 Months Of Insider Transactions At NetApp

Over the last year, we can see that the biggest insider sale was by the Independent Director, Gerald Held, for US$1.3m worth of shares, at about US$180 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$190. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 34% of Gerald Held's holding.

In the last year NetApp insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for NetApp

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Insider Ownership Of NetApp

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. NetApp insiders own 0.3% of the company, currently worth about US$122m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The NetApp Insider Transactions Indicate?

An insider hasn't bought NetApp stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But since NetApp is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of 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. You'd be interested to know, that we found 1 warning sign for NetApp and we suggest you have a look.

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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.