Stock Analysis

With Nutanix, Inc.'s (NASDAQ:NTNX)) price down 4.0% this week, insiders might find some solace having sold US$9.3m worth of shares earlier this year.

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NasdaqGS:NTNX
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By selling US$9.3m worth of Nutanix, Inc. (NASDAQ:NTNX) stock at an average sell price of US$30.71 over the last year, insiders seemed to have made the most of their holdings. The company's market valuation decreased by US$258m after the stock price dropped 4.0% over the past week, but insiders were spared from painful losses.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Nutanix

The Last 12 Months Of Insider Transactions At Nutanix

The President, Rajiv Ramaswami, made the biggest insider sale in the last 12 months. That single transaction was for US$5.8m worth of shares at a price of US$30.39 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$27.14. So it is hard to draw any strong conclusion from it.

Nutanix 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!

insider-trading-volume
NasdaqGS:NTNX Insider Trading Volume November 30th 2022

I will like Nutanix better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership Of Nutanix

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Insiders own 0.7% of Nutanix shares, worth about US$43m. 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 Do The Nutanix Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Still, the insider transactions at Nutanix in the last 12 months are not very heartening. But we do like the fact that insiders own a fair chunk of the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Be aware that Nutanix is showing 4 warning signs in our investment analysis, and 1 of those can't be ignored...

But note: Nutanix may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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, but not derivative transactions.

What are the risks and opportunities for Nutanix?

Nutanix, Inc. provides an enterprise cloud platform in North America, Europe, the Asia Pacific, the Middle East, Latin America, and Africa.

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Rewards

  • Trading at 22.2% below our estimate of its fair value

  • Revenue is forecast to grow 13.67% per year

Risks

  • Negative shareholders equity

  • Shareholders have been diluted in the past year

  • Significant insider selling over the past 3 months

  • Currently unprofitable and not forecast to become profitable over the next 3 years

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