Have Insiders Been Selling Adyen N.V. (AMS:ADYEN) Shares?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Adyen N.V. (AMS:ADYEN).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for Adyen

The Last 12 Months Of Insider Transactions At Adyen

In the last twelve months, the biggest single sale by an insider was when the Chief Commercial Officer & Member of Management Board, Roelant Prins, sold €69m worth of shares at a price of €1,365 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of €1,935. 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 15% of Roelant Prins's holding.

In the last twelve months insiders purchased 19.38k shares for €1.2m. But insiders sold 138.81k shares worth €164m. In total, Adyen insiders sold more than they bought over the last year. The average sell price was around €1,184. It's not too encouraging to see that insiders have sold at below the current price. But we wouldn't put too much weight on the insider selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. 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.

Insiders at Adyen Have Sold Stock Recently

There was substantially more insider selling, than buying, of Adyen shares over the last three months. In that time, CFO & Member of Management Board Ingo Uytdehaage dumped €5.3m worth of shares. On the flip side, CFO & Member of Management Board Ingo Uytdehaage spent €36k on purchasing shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.

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 Adyen insiders own 9.6% of the company, worth about €5.7b. 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 Adyen Tell Us?

The insider sales have outweighed the insider buying, at Adyen, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But since Adyen is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 1 warning sign with Adyen and understanding it should be part of your investment process.

Of course Adyen may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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. 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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