The Chair of Academic Advisory Board & Independent Director of Chegg, Inc. (NYSE:CHGG), Paul LeBlanc, Just Sold 52% Of Their Holding

We'd be surprised if Chegg, Inc. (NYSE:CHGG) shareholders haven't noticed that the Chair of Academic Advisory Board & Independent Director, Paul LeBlanc, recently sold US$361k worth of stock at US$28.00 per share. In particular, we note that the sale equated to a 52% reduction in their position size, which doesn't exactly instill confidence.

Our analysis indicates that CHGG is potentially undervalued!

Chegg Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Director Theodore Schlein for US$1.0m worth of shares, at about US$28.54 per share. That means that an insider was happy to buy shares at around the current price of US$28.76. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices.

Over the last year, we can see that insiders have bought 80.47k shares worth US$2.3m. But insiders sold 12.89k shares worth US$361k. In total, Chegg insiders bought more than they sold 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!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Chegg insiders own about US$99m worth of shares. That equates to 2.8% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Chegg Insider Transactions Indicate?

An insider sold Chegg shares recently, but they didn't buy any. But we take heart from prior transactions. It's good to see insiders are shareholders. So the recent selling doesn't worry us too much. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Our analysis shows 2 warning signs for Chegg (1 is concerning!) and we strongly recommend you look at them before investing.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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. 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.