Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Cornerstone OnDemand, Inc. (NASDAQ:CSOD).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
The Last 12 Months Of Insider Transactions At Cornerstone OnDemand
Over the last year, we can see that the biggest insider sale was by the Chief Financial Officer, Brian Swartz, for US$448k worth of shares, at about US$56.79 per share. That means that an insider was selling shares at around the current price of US$52.14. While we don’t usually like to see insider selling, it’s more concerning if the sales take price at a lower price. We note that this sale took place at around the current price, so it isn’t a major concern, though it’s hardly a good sign.
In the last twelve months insiders netted US$2.4m for 42344 shares sold. In the last year Cornerstone OnDemand insiders didn’t buy any company stock. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Cornerstone OnDemand better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Cornerstone OnDemand Insiders Are Selling The Stock
The last three months saw significant insider selling at Cornerstone OnDemand. In total, Brian Swartz dumped US$355k 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 of Cornerstone OnDemand
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that Cornerstone OnDemand insiders own 7.1% of the company, worth about US$219m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Cornerstone OnDemand Insider Transactions Indicate?
An insider sold stock recently, but they haven’t been buying. And there weren’t any purchases to give us comfort, over the last year. 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. Of course, the future is what matters most. So if you are interested in Cornerstone OnDemand, you should check out this free report on analyst forecasts for the company.
Of course Cornerstone OnDemand may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.