Insiders at Atlassian Corporation (NASDAQ:TEAM) sold US$4.2m worth of stock, a potential red flag that needs to be monitored
While it’s been a great week for Atlassian Corporation (NASDAQ:TEAM) shareholders after stock gained 9.2%, they should consider it with a grain of salt. Even though stock prices were relatively low, insiders elected to sell US$4.2m worth of stock in the last year, which could indicate some expected downturn.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Atlassian
Atlassian Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Chief Revenue Officer, Cameron Deatsch, sold US$652k worth of shares at a price of US$167 per share. That means that even when the share price was below the current price of US$178, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 3.1% of Cameron Deatsch's holding.
Atlassian insiders didn't buy any shares over the last year. 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!
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Atlassian Insiders Are Selling The Stock
The last three months saw significant insider selling at Atlassian. In total, insiders dumped US$2.4m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Atlassian insiders own 42% of the company, currently worth about US$19b 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 Atlassian Insider Transactions Indicate?
Insiders haven't bought Atlassian 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. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Atlassian has 2 warning signs and it would be unwise to ignore these.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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.
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