Don't Ignore The Insider Selling In nCino

Anyone interested in nCino, Inc. (NASDAQ:NCNO) should probably be aware that the CEO, President & Director, Sean Desmond, recently divested US$258k worth of shares in the company, at an average price of US$25.81 each. On the bright side, that sale was only 1.6% of their holding, so we doubt it's very meaningful, on its own.

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The Last 12 Months Of Insider Transactions At nCino

Over the last year, we can see that the biggest insider sale was by the Co-Founder & Executive Chairman, Pierre Naude, for US$707k worth of shares, at about US$23.00 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$26.26. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. 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. This single sale was just 2.5% of Pierre Naude's stake.

nCino insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for nCino

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

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. A high insider ownership often makes company leadership more mindful of shareholder interests. nCino insiders own about US$83m worth of shares. That equates to 2.7% 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.

So What Does This Data Suggest About nCino Insiders?

Insiders sold nCino shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. 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. In terms of investment risks, we've identified 1 warning sign with nCino and understanding it should be part of your investment process.

Of course nCino may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.