As NetApp, Inc.'s (NASDAQ:NTAP)) market cap dropped by US$1.5b, insiders who sold US$663k worth of stock were able to offset their losses

Simply Wall St
April 12, 2022
Source: Shutterstock

Insiders seem to have made the most of their holdings by selling US$663k worth of NetApp, Inc. (NASDAQ:NTAP) stock at an average sell price of US$89.98 during the past year. The company’s market cap plunged by US$1.5b after price dropped by 7.8% last week but insiders were able to limit their loss to an extent.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for NetApp

NetApp Insider Transactions Over The Last Year

The Executive VP & Chief Strategy Officer, Matthew Fawcett, made the biggest insider sale in the last 12 months. That single transaction was for US$310k worth of shares at a price of US$90.05 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$77.12). So it may not tell us anything about how insiders feel about the current share price.

In the last year NetApp 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!

NasdaqGS:NTAP Insider Trading Volume April 12th 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership of NetApp

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that NetApp insiders own 0.3% of the company, worth about US$43m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The NetApp Insider Transactions Indicate?

The fact that there have been no NetApp insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by NetApp insiders. But it's good to see that insiders own shares in 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 1 warning sign that you should run your eye over to get a better picture of NetApp.

But note: NetApp may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.