Have ServiceNow, Inc. (NYSE:NOW) Insiders Been Selling Their Stock?

Some ServiceNow, Inc. (NYSE:NOW) shareholders may be a little concerned to see that insider Paul Smith recently sold a substantial US$1.0m worth of stock at a price of US$447 per share. That diminished their holding by a very significant 100%, which arguably implies a strong desire to reallocate capital.

See our latest analysis for ServiceNow

The Last 12 Months Of Insider Transactions At ServiceNow

Over the last year, we can see that the biggest insider sale was by the President & COO, Chirantan Desai, for US$3.3m worth of shares, at about US$479 per share. That means that even when the share price was below the current price of US$491, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 15% of Chirantan Desai's holding.

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

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership Of ServiceNow

Many investors like to check how much of a company is owned by 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. It's great to see that ServiceNow insiders own 0.2% of the company, worth about US$215m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At ServiceNow Tell Us?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. On the plus side, ServiceNow makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. Case in point: We've spotted 1 warning sign for ServiceNow you should be aware of.

Of course ServiceNow 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, 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.