Workiva Inc. (NYSE:WK) insiders sold US$134m worth of stock, possibly signalling a downtrend

By
Simply Wall St
Published
March 14, 2022
NYSE:WK
Source: Shutterstock

The fact that multiple Workiva Inc. (NYSE:WK) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Workiva

Workiva Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the CEO & Director, Martin Vanderploeg, sold US$91m worth of shares at a price of US$151 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$95.19. So it is hard to draw any strong conclusion from it.

In the last year Workiva 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!

insider-trading-volume
NYSE:WK Insider Trading Volume March 14th 2022

I will like Workiva better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Workiva Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Workiva shares. In total, Executive VP & Chief Customer Officer Mithun Banarjee sold US$1.0m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Workiva 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. 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 Workiva insiders own 16% of the company, worth about US$786m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Workiva Insiders?

An insider hasn't bought Workiva 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. 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. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Workiva. To that end, you should learn about the 5 warning signs we've spotted with Workiva (including 1 which is significant).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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