SecureWorks Insider Confidence Rewarded, Stock Hits US$718m Market Cap

Last week, SecureWorks Corp. (NASDAQ:SCWX) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 15% last week, resulting in a US$94m increase in the company's market worth, implying a 30% gain on their initial purchase. Put another way, the original US$389.1k acquisition is now worth US$505.2k.

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.

View our latest analysis for SecureWorks

SecureWorks Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Neil Gagnon for US$107k worth of shares, at about US$5.99 per share. Even though the purchase was made at a significantly lower price than the recent price (US$8.13), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Neil Gagnon bought a total of 62.14k shares over the year at an average price of US$6.26. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

SecureWorks is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Does SecureWorks Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 5.8% of SecureWorks shares, worth about US$41m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The SecureWorks Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders own shares in SecureWorks and we see no evidence to suggest they are worried about the future. While it's good to be aware of 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. While conducting our analysis, we found that SecureWorks has 3 warning signs and it would be unwise to ignore these.

But note: SecureWorks 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 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.