Don't Ignore The Insider Selling In Rackspace Technology

Anyone interested in Rackspace Technology, Inc. (NASDAQ:RXT) should probably be aware that the President, Amar Maletira, recently divested US$144k worth of shares in the company, at an average price of US$1.30 each. However, the silver lining is that the sale only reduced their total holding by 2.3%, so we're hesitant to read anything much into it, on its own.

Check out our latest analysis for Rackspace Technology

The Last 12 Months Of Insider Transactions At Rackspace Technology

In the last twelve months, the biggest single purchase by an insider was when Independent Lead Director Shashank Samant bought US$455k worth of shares at a price of US$4.55 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$1.34). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Happily, we note that in the last year insiders paid US$596k for 142.28k shares. But they sold 114.19k shares for US$149k. In total, Rackspace Technology insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Rackspace Technology insiders own 11% of the company, worth about US$32m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Rackspace Technology Insider Transactions Indicate?

Insiders haven't bought Rackspace Technology stock in the last three months, but there was some selling. In contrast, they appear keener if you look at the last twelve months. It's good to see insiders are shareholders. So the recent selling doesn't worry us too much. 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. For instance, we've identified 5 warning signs for Rackspace Technology (2 are significant) you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.