MongoDB Insiders Sold US$24m Of Shares Suggesting Hesitancy

The fact that multiple MongoDB, Inc. (NASDAQ:MDB) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

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.

See our latest analysis for MongoDB

The Last 12 Months Of Insider Transactions At MongoDB

The Chief Revenue Officer, Cedric Pech, made the biggest insider sale in the last 12 months. That single transaction was for US$6.1m worth of shares at a price of US$409 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$335). So it is hard to draw any strong conclusion from it.

In the last year MongoDB insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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MongoDB Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at MongoDB. In total, insiders sold US$8.8m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership Of MongoDB

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. MongoDB insiders own about US$860m worth of shares (which is 3.6% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At MongoDB Tell Us?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing MongoDB. While conducting our analysis, we found that MongoDB has 3 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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