We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell SailPoint Technologies Holdings, Inc. (NYSE:SAIL), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
SailPoint Technologies Holdings Insider Transactions Over The Last Year
The Chief Financial Officer, J. McMartin, made the biggest insider sale in the last 12 months. That single transaction was for US$2.1m worth of shares at a price of US$28.35 each. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. The silver lining is that this sell-down took place above the latest price (US$18.48). So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was J. McMartin.
The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. SailPoint Technologies Holdings insiders own about US$85m worth of shares. That equates to 5.2% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At SailPoint Technologies Holdings Tell Us?
The fact that there have been no SailPoint Technologies Holdings insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by SailPoint Technologies Holdings insiders. But we do like the fact that insiders own a fair chunk of the company. 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.
But note: SailPoint Technologies Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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.