Have Cloudflare Insiders Been Selling Stock?
We wouldn't blame Cloudflare, Inc. (NYSE:NET) shareholders if they were a little worried about the fact that Carl Ledbetter, the Independent Director recently netted about US$1.6m selling shares at an average price of US$312. However, that sale only accounted for 0.6% of their holding, so arguably it doesn't say much about their conviction.
The Last 12 Months Of Insider Transactions At Cloudflare
The Co-Founder, Matthew Prince, made the biggest insider sale in the last 12 months. That single transaction was for US$13m worth of shares at a price of US$226 each. That means that even when the share price was below the current price of US$352, 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was 71% of Matthew Prince's holding.
In the last year Cloudflare 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!
View our latest analysis for Cloudflare
I will like Cloudflare better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Does Cloudflare Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It's great to see that Cloudflare insiders own 9.7% of the company, worth about US$11b. 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 Cloudflare Insiders?
An insider hasn't bought Cloudflare stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Cloudflare. Every company has risks, and we've spotted 1 warning sign for Cloudflare you should know about.
Of course Cloudflare may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.