The fact that multiple Veeva Systems Inc. (NYSE:VEEV) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Veeva Systems
The Director, Timothy Cabral, made the biggest insider sale in the last 12 months. That single transaction was for US$1.9m worth of shares at a price of US$192 each. That means that an insider was selling shares at below the current price (US$195). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 7.8% of Timothy Cabral's holding.
Veeva Systems insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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. Veeva Systems insiders own about US$2.8b worth of shares (which is 9.0% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Veeva Systems Tell Us?
It doesn't really mean much that no insider has traded Veeva Systems shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Veeva Systems insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Veeva Systems. Every company has risks, and we've spotted 1 warning sign for Veeva Systems you should know about.
But note: Veeva Systems 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.
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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