Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Pure Storage, Inc. (NYSE:PSTG).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. 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.’
Pure Storage Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by CEO & Chairman Charles Giancarlo for US$1.5m worth of shares, at about US$27.46 per share. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of US$18.73. So it is hard to draw any strong conclusion from it.
Over the last year we saw more insider selling of Pure Storage shares, than buying. They sold for an average price of about US$24.98. It is certainly not great to see that insiders have sold shares in the company. But the selling was at much higher prices than the current share price (US$18.73), so it probably doesn’t tell us a lot about the value on offer today. 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!
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.
Insiders at Pure Storage Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Pure Storage. David Hatfield spent US$249k on stock, and there wasn’t any selling. This makes one think the business has some good points.
Does Pure Storage Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It’s great to see that Pure Storage insiders own 12% of the company, worth about US$548m. 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 Do The Pure Storage Insider Transactions Indicate?
The recent insider purchase is heartening. But we can’t say the same for the transactions over the last 12 months. The high levels of insider ownership, and the recent buying by an insider, suggests they are well aligned and optimistic. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Pure Storage may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.