Don't Ignore The Insider Selling In Palo Alto Networks

We wouldn't blame Palo Alto Networks, Inc. (NASDAQ:PANW) shareholders if they were a little worried about the fact that James Goetz, the Independent Director recently netted about US$4.9m selling shares at an average price of US$195. However, that sale only accounted for 6.2% of their holding, so arguably it doesn't say much about their conviction.

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Palo Alto Networks Insider Transactions Over The Last Year

In fact, the recent sale by James Goetz was the biggest sale of Palo Alto Networks shares made by an insider individual in the last twelve months, according to our records. So what is clear is that an insider saw fit to sell at around the current price of US$186. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Palo Alto Networks 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. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Palo Alto Networks

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Insider Ownership Of Palo Alto Networks

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Palo Alto Networks insiders own 0.9% of the company, currently worth about US$1.1b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Palo Alto Networks Insiders?

An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. 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 2 warning signs for Palo Alto Networks 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.