Have Cogent Communications Holdings Insiders Been Selling Stock?

Some Cogent Communications Holdings, Inc. (NASDAQ:CCOI) shareholders may be a little concerned to see that the Founder, David Schaeffer, recently sold a substantial US$4.4m worth of stock at a price of US$72.82 per share. However, that sale only accounted for 1.4% of their holding, so arguably it doesn't say much about their conviction.

Check out our latest analysis for Cogent Communications Holdings

Cogent Communications Holdings Insider Transactions Over The Last Year

In fact, the recent sale by Founder David Schaeffer was not their only sale of Cogent Communications Holdings shares this year. Earlier in the year, they fetched US$68.12 per share in a -US$5.8m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of US$70.17. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. We note that the biggest single sale was only 1.8% of David Schaeffer's holding.

All up, insiders sold more shares in Cogent Communications Holdings than they bought, over the last year. 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!

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Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Cogent Communications Holdings insiders own about US$356m worth of shares (which is 11% of the company). 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 Cogent Communications Holdings Insiders?

Unfortunately, there has been more insider selling of Cogent Communications Holdings stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 6 warning signs we've spotted with Cogent Communications Holdings (including 4 which can't be ignored).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.