Over the past year, many Salesforce, Inc. (NYSE:CRM) insiders sold a significant stake in the company which may have piqued investors’ interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
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.
View our latest analysis for Salesforce
The Last 12 Months Of Insider Transactions At Salesforce
Over the last year, we can see that the biggest insider sale was by the Co-Founder, Marc Benioff, for US$132m worth of shares, at about US$267 per share. So what is clear is that an insider saw fit to sell at around the current price of US$256. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
All up, insiders sold more shares in Salesforce 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
Insiders At Salesforce Have Sold Stock Recently
We’ve seen more insider selling than insider buying at Salesforce recently. We note insiders cashed in US$17m worth of shares. Meanwhile insider Oscar Munoz bought US$500k worth , as we said above . Since the selling really does outweigh the buying, we’d say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Salesforce insiders own 2.7% of the company, currently worth about US$6.6b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Salesforce Insider Transactions Indicate?
The insider sales have outweighed the insider buying, at Salesforce, in the last three months. And our longer term analysis of insider transactions didn’t bring confidence, either. But since Salesforce is profitable and growing, we’re not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company. 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. You’d be interested to know, that we found 1 warning sign for Salesforce and we suggest you have a look.
But note: Salesforce 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.
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