Some of the losses seen by insiders who purchased US$20m worth of Netflix, Inc. (NASDAQ:NFLX) shares over the past year were recovered after the stock increased by 3.9% over the past week. However, total losses seen by insiders are still US$10m but in since the time of purchase.
Although we don’t think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Netflix
The Last 12 Months Of Insider Transactions At Netflix
In the last twelve months, the biggest single purchase by an insider was when Co-Founder Wilmot Hastings bought US$20m worth of shares at a price of US$393 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$187). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Wilmot Hastings.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Netflix insiders own about US$1.1b worth of shares (which is 1.3% 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.
So What Do The Netflix Insider Transactions Indicate?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Netflix insiders are reasonably well aligned (owning significant chunk of the company’s shares) and optimistic for the future. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Netflix. For instance, we’ve identified 3 warning signs for Netflix (2 can’t be ignored) you should be aware of.
Of course Netflix 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, but not derivative transactions.
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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.
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