Have Ferrari Insiders Been Selling Stock?

Some Ferrari N.V. (BIT:RACE) shareholders may be a little concerned to see that the Executive Chairman, John Elkann, recently sold a substantial €1.6m worth of stock at a price of €414 per share. However, that sale only accounted for 10.0% of their holding, so arguably it doesn't say much about their conviction.

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Ferrari Insider Transactions Over The Last Year

In fact, the recent sale by John Elkann was the biggest sale of Ferrari shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of €416. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 10.0% of John Elkann's holding.

Ferrari insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Does Ferrari Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Ferrari insiders own 11% of the company, worth about €7.9b. 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 Ferrari Insider Transactions Indicate?

Insiders sold Ferrari shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Ferrari is growing earnings. 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. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Ferrari. While conducting our analysis, we found that Ferrari has 2 warning signs and it would be unwise to ignore them.

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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 of direct interests only, but not derivative transactions or indirect interests.

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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.