Don't Ignore The Insider Selling In Pure Storage

Some Pure Storage, Inc. (NYSE:PSTG) shareholders may be a little concerned to see that the Chief Product Officer, Ajay Singh, recently sold a substantial US$1.2m worth of stock at a price of US$61.58 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 9.8%.

Check out our latest analysis for Pure Storage

The Last 12 Months Of Insider Transactions At Pure Storage

The Independent Vice Chairman, Scott Dietzen, made the biggest insider sale in the last 12 months. That single transaction was for US$7.9m worth of shares at a price of US$53.49 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$64.23. 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. This single sale was just 15% of Scott Dietzen's stake.

In the last year Pure Storage insiders didn't buy any company stock. 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!

I will like Pure Storage 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 Pure Storage

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Pure Storage insiders own 5.1% of the company, currently worth about US$1.1b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Pure Storage Insiders?

Insiders haven't bought Pure Storage stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, Pure Storage makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. At Simply Wall St, we found 2 warning signs for Pure Storage that deserve your attention before buying any shares.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.