Insiders Sold Bandwidth Prematurely At US$15.18 With Stock Trading Higher

Despite the fact that Bandwidth Inc.'s (NASDAQ:BAND) value has dropped 16% in the last week insiders who sold US$407k worth of stock in the past 12 months have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of US$15.18 is still lower than the current share price.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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Bandwidth Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chief People Officer & Director, Rebecca Bottorff, for US$256k worth of shares, at about US$15.14 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$13.21. So it is hard to draw any strong conclusion from it.

Bandwidth insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for Bandwidth

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Bandwidth Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Bandwidth. In total, Chief People Officer & Director Rebecca Bottorff sold US$256k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of Bandwidth

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 7.1% of Bandwidth shares, worth about US$34m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Bandwidth Insiders?

An insider hasn't bought Bandwidth stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Bandwidth has 1 warning sign we think you should be aware of.

But note: Bandwidth 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.