Don't Ignore The Insider Selling In Rubrik

Some Rubrik, Inc. (NYSE:RBRK) shareholders may be a little concerned to see that the President of Global Field Operations, Brian McCarthy, recently sold a substantial US$2.5m worth of stock at a price of US$100 per share. However, that sale only accounted for 8.1% of their holding, so arguably it doesn't say much about their conviction.

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The Last 12 Months Of Insider Transactions At Rubrik

In the last twelve months, the biggest single sale by an insider was when the insider, Barry Eggers, sold US$3.3m worth of shares at a price of US$32.74 per share. That means that an insider was selling shares at slightly below the current price (US$88.86). 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was 64% of Barry Eggers's holding.

Insiders in Rubrik didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Rubrik

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Does Rubrik Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Rubrik insiders own about US$3.2b worth of shares (which is 19% of the company). 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 Does This Data Suggest About Rubrik Insiders?

An insider sold Rubrik shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Rubrik. To help with this, we've discovered 4 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Rubrik.

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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 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.