Selling Five9 Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Despite the fact that Five9, Inc.'s (NASDAQ:FIVN) value has dropped 14% in the last week insiders who sold US$2.4m worth of stock in the past 12 months have had less success. The average selling price of US$42.16 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

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.

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Five9 Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CEO & Chairman, Michael Burkland, for US$573k worth of shares, at about US$46.30 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$25.24. So it is hard to draw any strong conclusion from it.

Insiders in Five9 didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Five9

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Five9 Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Five9. Specifically, insiders ditched US$227k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Does Five9 Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Five9 insiders own about US$45m worth of shares. That equates to 2.1% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Five9 Tell Us?

Insiders sold Five9 shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! 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. You'd be interested to know, that we found 1 warning sign for Five9 and we suggest you have a look.

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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.