Yahoo Finance Palo Alto Networks Insiders Sold US$20m Of Shares Suggesting Hesitancy
Over the past year, many Palo Alto Networks, Inc. (NASDAQ:PANW) insiders sold a significant stake in the company which may have piqued investors' interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Palo Alto Networks
The Last 12 Months Of Insider Transactions At Palo Alto Networks
The Chairman & CEO, Nikesh Arora, made the biggest insider sale in the last 12 months. That single transaction was for US$17m 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$291, an insider wanted to cash in some shares. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 13% of Nikesh Arora's holding.
Palo Alto Networks insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Palo Alto Networks better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does Palo Alto Networks 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. Palo Alto Networks insiders own 1.0% of the company, currently worth about US$900m 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 Palo Alto Networks Insiders?
The fact that there have been no Palo Alto Networks insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Palo Alto Networks, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 2 warning signs for Palo Alto Networks (1 shouldn't be ignored!) and we strongly recommend you look at them before investing.
Of course Palo Alto Networks 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.
