Don't Ignore The Insider Selling In VeriSign

Some VeriSign, Inc. (NASDAQ:VRSN) shareholders may be a little concerned to see that the Executive Chairman of the Board & CEO, D. Bidzos, recently sold a substantial US$3.1m worth of stock at a price of US$209 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 2.8%.

Check out our latest analysis for VeriSign

The Last 12 Months Of Insider Transactions At VeriSign

In fact, the recent sale by D. Bidzos was the biggest sale of VeriSign shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of US$214, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. We note that the biggest single sale was only 2.8%of D. Bidzos's holding.

VeriSign 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!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. VeriSign insiders own about US$186m worth of shares (which is 0.9% of the company). 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 Do The VeriSign Insider Transactions Indicate?

Insiders sold VeriSign shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about 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 VeriSign is showing 3 warning signs in our investment analysis, and 1 of those shouldn't be ignored...

But note: VeriSign 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.