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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Pivotal Software, Inc. (NYSE:PVTL).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
Pivotal Software Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the CEO & Director, Robert Mee, for US$1.5m worth of shares, at about US$20.29 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$11.26). So it is hard to draw any strong conclusion from it.
Over the last year, we note insiders sold 219k shares worth US$4.4m. In the last year Pivotal Software insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Pivotal Software Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at Pivotal Software. In total, insiders dumped US$4.4m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Insider Ownership of Pivotal Software
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Pivotal Software insiders own 0.3% of the company, worth about US$8.6m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Does This Data Suggest About Pivotal Software Insiders?
Insiders haven't bought Pivotal Software 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. When you combine this with the relatively low insider ownership, we are very cautious about the stock. We'd certainly think twice before buying! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Pivotal Software.
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 aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.