Have Insiders Sold Western Digital Shares Recently?

We wouldn't blame Western Digital Corporation (NASDAQ:WDC) shareholders if they were a little worried about the fact that Robert Soderbery, the Executive VP & GM of Flash Business recently netted about US$2.0m selling shares at an average price of US$73.48. That sale reduced their total holding by 16% which is hardly insignificant, but far from the worst we've seen.

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The Last 12 Months Of Insider Transactions At Western Digital

Notably, that recent sale by Executive VP & GM of Flash Business Robert Soderbery was not the only time they sold Western Digital shares this year. They previously made an even bigger sale of -US$2.8m worth of shares at a price of US$43.11 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$77.10. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 27% of Robert Soderbery's stake.

Robert Soderbery divested 92.31k shares over the last 12 months at an average price of US$51.81. 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 Western Digital 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 Western Digital

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Western Digital insiders own about US$95m worth of shares. That equates to 0.4% of the company. 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 Western Digital Insider Transactions Indicate?

An insider sold Western Digital shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, Western Digital has 3 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

But note: Western Digital 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 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.