Pinterest Insiders Sold US$5.2m Of Shares Suggesting Hesitancy

Many Pinterest, Inc. (NYSE:PINS) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Pinterest

The Last 12 Months Of Insider Transactions At Pinterest

The insider, Todd Morgenfeld, made the biggest insider sale in the last 12 months. That single transaction was for US$5.0m worth of shares at a price of US$27.52 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$34.29. 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. We note that the biggest single sale was 100% of Todd Morgenfeld's holding.

In the last year Pinterest 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. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Pinterest better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Pinterest insiders own 12% of the company, worth about US$2.8b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Pinterest Insiders?

The fact that there have been no Pinterest insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Pinterest, we can't say the same about the selling of shares. Of course, the future is what matters most. So if you are interested in Pinterest, you should check out this free report on analyst forecasts for the company.

Of course Pinterest 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 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.