Western Digital Insider Lowered Holding By 27% During Last Year

Insiders were net sellers of Western Digital Corporation's (NASDAQ:WDC ) stock during the past year. That is, insiders sold more stock than they bought.

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.

Check out our latest analysis for Western Digital

Western Digital Insider Transactions Over The Last Year

The Executive VP & GM of Flash Business, Robert Soderbery, made the biggest insider sale in the last 12 months. That single transaction was for US$2.8m worth of shares at a price of US$43.11 each. That means that even when the share price was below the current price of US$74.81, an insider wanted to cash in some shares. 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. 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 was the only individual insider to sell over the last year.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company 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. Western Digital insiders own about US$93m worth of shares. That equates to 0.4% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Western Digital Insider Transactions Indicate?

The fact that there have been no Western Digital insider transactions recently certainly doesn't bother us. Our analysis of Western Digital insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. 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. For example, Western Digital has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.

Of course Western Digital may not be the best stock to buy. So you may wish to see this free collection of high quality 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 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.