Insiders Relieved After Selling Cerence With 12% Price Dip

Insiders seem to have made the most of their holdings by selling US$313k worth of Cerence Inc. (NASDAQ:CRNC) stock at an average sell price of US$5.13 during the past year. The company's market worth decreased by US$46m over the past week after the stock price dropped 12%, although insiders were able to minimize their losses

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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Cerence Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Thomas Beaudoin, sold US$87k worth of shares at a price of US$7.21 per share. That means that an insider was selling shares at slightly below the current price (US$8.14). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 10% of Thomas Beaudoin's holding.

Insiders in Cerence didn't buy any shares in 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

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Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Cerence insiders own 1.7% of the company, worth about US$6.2m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Cerence Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Cerence shares in the last quarter. We don't take much encouragement from the transactions by Cerence insiders. And usually insiders own more stock in the company, according to our data. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Cerence has 2 warning signs and it would be unwise to ignore these.

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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.