Insider Sales At Cerence Landed A Good Price

While it’s been a great week for Cerence Inc. (NASDAQ:CRNC) shareholders after stock gained 11%, company insiders might have missed out on those gains after selling stock earlier this year. The return on their investment would have been much higher had they held on to their stock.

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.

Our free stock report includes 2 warning signs investors should be aware of before investing in Cerence. Read for free now.

The Last 12 Months Of Insider Transactions At Cerence

The insider, Thomas Beaudoin, made the biggest insider sale in the last 12 months. That single transaction was for US$87k worth of shares at a price of US$7.21 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$8.17. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 10% of Thomas Beaudoin's stake.

Cerence insiders didn't buy any shares over the last year. 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!

See our latest analysis for Cerence

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.

Cerence Insiders Are Selling The Stock

The last three months saw significant insider selling at Cerence. Specifically, Executive VP & Chief Revenue Officer Christian Mentz ditched US$53k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Cerence insiders own 1.7% of the company, worth about US$5.6m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

What Might The Insider Transactions At Cerence Tell Us?

An insider hasn't bought Cerence 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. When you consider that most companies have higher levels of insider ownership, we're a little wary. So we'd only buy after very careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 2 warning signs for Cerence you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.