We wouldn't blame GoDaddy Inc. (NYSE:GDDY) shareholders if they were a little worried about the fact that Amanpal Bhutani, the CEO & Director recently netted about US$772k selling shares at an average price of US$82.41. However, that sale only accounted for 8.4% of their holding, so arguably it doesn't say much about their conviction.
GoDaddy Insider Transactions Over The Last Year
In fact, the recent sale by CEO & Director Amanpal Bhutani was not their only sale of GoDaddy shares this year. Earlier in the year, they fetched US$75.62 per share in a -US$807k sale. That means that an insider was selling shares at slightly below the current price (US$80.00). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 11% of Amanpal Bhutani's stake.
Insiders in GoDaddy didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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Insider Ownership of GoDaddy
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that GoDaddy insiders own 0.3% of the company, worth about US$43m. 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 GoDaddy Insider Transactions Indicate?
Insiders haven't bought GoDaddy stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 2 warning signs for GoDaddy (1 is significant!) that we believe deserve your full attention.
But note: GoDaddy 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, but not derivative transactions.
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