VeriSign Insiders Sold US$19m Of Shares Suggesting Hesitancy

Many VeriSign, Inc. (NASDAQ:VRSN) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for VeriSign

VeriSign Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive Chairman, D. Bidzos, for US$3.2m worth of shares, at about US$220 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$181). So it is hard to draw any strong conclusion from it.

In the last year VeriSign insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like VeriSign better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

VeriSign Insiders Are Selling The Stock

The last three months saw significant insider selling at VeriSign. In total, insiders dumped US$1.7m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of VeriSign

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that VeriSign insiders own 0.9% of the company, worth about US$157m. 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 even if we look at the last year, we didn't see any purchases. But since VeriSign is profitable and growing, we're not too worried by this. 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. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing VeriSign. At Simply Wall St, we've found that VeriSign has 3 warning signs (1 is potentially serious!) that deserve your attention before going any further with your analysis.

Of course VeriSign may not be the best stock to buy. So you may wish to see this free collection of high quality 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.