Insider Sellers Might Regret Selling Cerence Shares at a Lower Price Than Current Market Value

Cerence Inc.'s (NASDAQ:CRNC) value has fallen 12% in the last week, but insiders who sold US$2.0m worth of stock over the last year have had less success. Insiders might have been better off holding onto their shares, given that the average selling price of US$17.96 is still below the current share price.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Cerence

Cerence Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the President, Stefan Ortmanns, sold US$974k worth of shares at a price of US$17.97 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$2.92. So it may not shed much light on insider confidence at current levels.

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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data suggests Cerence insiders own 2.7% of the company, worth about US$3.3m. We prefer to see high levels of insider ownership.

So What Does This Data Suggest About Cerence Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. The insider transactions at Cerence are not inspiring us to buy. And usually insiders own more stock in the company, according to our data. 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. Every company has risks, and we've spotted 2 warning signs for Cerence you should know about.

But note: Cerence 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.