Possible Bearish Signals With Box Insiders Disposing Stock

Box, Inc. (NYSE:BOX) shareholders may have reason to be concerned, as several insiders sold their shares over the past year. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Box

Box Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Lead Independent Director, Dana Evan, sold US$313k worth of shares at a price of US$28.47 per share. That means that an insider was selling shares at slightly below the current price (US$31.71). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 9.1% of Dana Evan's holding.

In the last year Box insiders didn't buy any company stock. 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!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Box Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Box. Specifically, VP, Chief Accounting Officer & Controller Eliahu Berkovitch ditched US$304k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of Box

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Box insiders own about US$171m worth of shares (which is 3.8% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Box Insiders?

An insider sold Box shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But it is good to see that Box is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Box. While conducting our analysis, we found that Box has 1 warning sign and it would be unwise to ignore it.

But note: Box 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.