Don't Ignore The Insider Selling In NetApp

We wouldn't blame NetApp, Inc. (NASDAQ:NTAP) shareholders if they were a little worried about the fact that George Kurian, the CEO & Director recently netted about US$1.1m selling shares at an average price of US$123. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 3.1%.

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The Last 12 Months Of Insider Transactions At NetApp

In fact, the recent sale by George Kurian was the biggest sale of NetApp shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$125. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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. It is worth noting that this sale was only 3.1% of George Kurian's holding.

Over the last year we saw more insider selling of NetApp shares, than buying. 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!

Check out our latest analysis for NetApp

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Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that NetApp insiders own 0.4% of the company, worth about US$97m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At NetApp Tell Us?

An insider sold NetApp shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that NetApp is growing earnings. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of NetApp.

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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.