As Salesforce, Inc.'s (NYSE:CRM)) market cap dropped by US$18b, insiders who sold US$9.2m worth of stock were able to offset their losses

By selling US$9.2m worth of Salesforce, Inc. (NYSE:CRM) stock at an average sell price of US$238 over the last year, insiders seemed to have made the most of their holdings. The company's market worth decreased by US$18b over the past week after the stock price dropped 9.5%, although insiders were able to minimize their losses

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.

View our latest analysis for Salesforce

The Last 12 Months Of Insider Transactions At Salesforce

The President & Chief Engineering Officer, Srinivas Tallapragada, made the biggest insider sale in the last 12 months. That single transaction was for US$6.6m worth of shares at a price of US$266 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$171. So it may not tell us anything about how insiders feel about the current share price.

Insiders in Salesforce didn't buy any shares in the last year. 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!

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Salesforce Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Salesforce. In total, insiders sold US$2.5m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership of Salesforce

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Salesforce insiders own 3.3% of the company, worth about US$5.6b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Salesforce Tell Us?

Insiders sold Salesforce 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. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Every company has risks, and we've spotted 5 warning signs for Salesforce you should know about.

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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, but not derivative transactions.

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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.