This Insider Has Just Sold Shares In Snowflake

We wouldn't blame Snowflake Inc. (NYSE:SNOW) shareholders if they were a little worried about the fact that Vivek Raghunathan, the Senior Vice President of Engineering recently netted about US$2.6m selling shares at an average price of US$223. That's a big disposal, and it decreased their holding size by 16%, which is notable but not too bad.

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Snowflake Insider Transactions Over The Last Year

Notably, that recent sale by Vivek Raghunathan is the biggest insider sale of Snowflake shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of US$235. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 16% of Vivek Raghunathan's holding.

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

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Does Snowflake Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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 Snowflake insiders own 3.1% of the company, worth about US$2.5b. 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 Snowflake Insiders?

Insiders haven't bought Snowflake 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. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 2 warning signs with Snowflake and understanding these should be part of your investment process.

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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.