Even though Confluent, Inc. (NASDAQ:CFLT) stock gained 26% last week, insiders who sold US$20m worth of stock over the past year are probably better off. Selling at an average price of US$83.07, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Confluent Insider Transactions Over The Last Year
The insider, John Gurley, made the biggest insider sale in the last 12 months. That single transaction was for US$11m worth of shares at a price of US$86.43 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$25.28). So it is hard to draw any strong conclusion from it.
In the last year Confluent insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Confluent Have Sold Stock Recently
The last three months saw some Confluent insider selling. Chief Accounting Officer Ying Liu divested only US$13k worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the amount sold isn't enough for us to put any weight on it.
Does Confluent 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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Confluent insiders own 21% of the company, worth about US$1.5b. 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 Confluent Insider Transactions Indicate?
While there has not been any insider buying in the last three months, there has been selling. But given the selling was modest, we're not worried. While we feel good about high insider ownership of Confluent, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of Confluent.
But note: Confluent 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, 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.