Shareholders May Not Overlook Cardlytics Insiders Selling US$3.1m In Stock

Even though Cardlytics, Inc. (NASDAQ:CDLX) stock gained 11% last week, insiders who sold US$3.1m worth of stock over the past year are probably better off. Selling at an average price of US$17.04, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Cardlytics

Cardlytics Insider Transactions Over The Last Year

The CEO & Director, Karim Temsamani, made the biggest insider sale in the last 12 months. That single transaction was for US$2.9m worth of shares at a price of US$17.71 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$8.93. So it may not tell us anything about how insiders feel about the current share price.

In the last year Cardlytics insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Does Cardlytics Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Cardlytics insiders own 1.9% of the company, worth about US$7.9m. We do generally prefer see higher levels of insider ownership.

So What Do The Cardlytics Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Cardlytics shares in the last quarter. We don't take much encouragement from the transactions by Cardlytics insiders. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. 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. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of Cardlytics.

But note: Cardlytics 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com