One Arista Networks Insider Has Reduced Their Stake

Viewing insider transactions for Arista Networks, Inc.'s (NYSE:ANET ) over the last year, we see that insiders were net sellers. This means that a larger number of shares were sold by insiders in relation to shares purchased.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Arista Networks

The Last 12 Months Of Insider Transactions At Arista Networks

Over the last year, we can see that the biggest insider sale was by the Co-Founder, Kenneth Duda, for US$4.7m worth of shares, at about US$326 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$386. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 1.3% of Kenneth Duda's holding. Kenneth Duda was the only individual insider to sell over the last year.

The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Does Arista Networks Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Arista Networks insiders own about US$22b worth of shares (which is 18% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Arista Networks Tell Us?

The fact that there have been no Arista Networks insider transactions recently certainly doesn't bother us. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Arista Networks insider transactions don't fill us with confidence. Of course, the future is what matters most. So if you are interested in Arista Networks, you should check out this free report on analyst forecasts for the company.

But note: Arista Networks 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.