As Couchbase, Inc.'s market cap (NASDAQ:BASE) drops to US$981m, insiders might be questioning their decision to buy earlier this year
The recent 13% drop in Couchbase, Inc.'s (NASDAQ:BASE) stock could come as a blow to insiders who purchased US$750k worth of stock at an average buy price of US$24.00 over the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$703k.
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 Couchbase
The Last 12 Months Of Insider Transactions At Couchbase
In the last twelve months, the biggest single purchase by an insider was when insider Edward Anderson bought US$750k worth of shares at a price of US$24.00 per share. That means that an insider was happy to buy shares at above the current price of US$22.50. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. 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. Edward Anderson 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.
Does Couchbase Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From what we can see in our data, insiders own only about US$799k worth of Couchbase shares. We might be missing something but that seems like very low insider ownership.
What Might The Insider Transactions At Couchbase Tell Us?
The fact that there have been no Couchbase insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. We'd like to see bigger individual holdings. However, we don't see anything to make us think Couchbase insiders are doubting the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Couchbase. Every company has risks, and we've spotted 3 warning signs for Couchbase (of which 1 is a bit unpleasant!) you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, 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.
