Have Robinhood Markets Insiders Been Selling Stock?

We wouldn't blame Robinhood Markets, Inc. (NASDAQ:HOOD) shareholders if they were a little worried about the fact that Jason Warnick, the Chief Financial Officer recently netted about US$3.1m selling shares at an average price of US$61.98. However, that sale only accounted for 5.2% of their holding, so arguably it doesn't say much about their conviction.

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Robinhood Markets Insider Transactions Over The Last Year

The Independent Director, Meyer Malka Rais, made the biggest insider sale in the last 12 months. That single transaction was for US$19m worth of shares at a price of US$34.90 each. That means that an insider was selling shares at slightly below the current price (US$64.27). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 20% of Meyer Malka Rais's holding.

Robinhood Markets 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!

See our latest analysis for Robinhood Markets

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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. We usually like to see fairly high levels of insider ownership. Robinhood Markets insiders own about US$4.7b worth of shares (which is 8.3% 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.

So What Do The Robinhood Markets Insider Transactions Indicate?

An insider hasn't bought Robinhood Markets stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But since Robinhood Markets is profitable and growing, we're not too worried by this. 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. While it's good to be aware of 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. You'd be interested to know, that we found 2 warning signs for Robinhood Markets and we suggest you have a look.

But note: Robinhood Markets 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 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.