This Insider Has Just Sold Shares In Shopify

We wouldn't blame Shopify Inc. (NYSE:SHOP) shareholders if they were a little worried about the fact that Toby Shannan, the Director recently netted about US$6.3m selling shares at an average price of US$127. That sale reduced their total holding by 16% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for Shopify

Shopify Insider Transactions Over The Last Year

Notably, that recent sale by Toby Shannan is the biggest insider sale of Shopify shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$128. 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. It is worth noting that this sale was only 16% of Toby Shannan's holding.

Insiders in Shopify 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Shopify better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership Of Shopify

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Shopify insiders own 6.3% of the company, worth about US$10b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Shopify Insiders?

Insiders haven't bought Shopify stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But since Shopify is profitable and growing, we're not too worried by this. 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 these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Shopify.

Of course Shopify 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 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.