This Insider Has Just Sold Shares In Adobe

We wouldn't blame Adobe Inc. (NASDAQ:ADBE) shareholders if they were a little worried about the fact that Shantanu Narayen, the Chairman & CEO recently netted about US$13m selling shares at an average price of US$522. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 6.5%.

View our latest analysis for Adobe

The Last 12 Months Of Insider Transactions At Adobe

Notably, that recent sale by Chairman & CEO Shantanu Narayen was not the only time they sold Adobe shares this year. They previously made an even bigger sale of -US$19m worth of shares at a price of US$600 per share. 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$515. So it may not tell us anything about how insiders feel about the current share price.

In total, Adobe insiders sold more than they bought over the last year. 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 Adobe better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Adobe Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Adobe insiders own 0.2% of the company, currently worth about US$357m based on the recent share price. 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 Does This Data Suggest About Adobe Insiders?

Insiders sold Adobe shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Adobe makes money, and is growing profits. 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. At Simply Wall St, we found 1 warning sign for Adobe that deserve your attention before buying any shares.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.