It is not uncommon for companies to perform well in the years after insiders bought shares. Unfortunately, there are also plenty of examples of stock prices dropping abruptly after insiders sell stocks. So shareholders may want to know whether insiders bought or sold shares F5 Networks, Inc. (NASDAQ: FFIV).
What is insider buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities and must not trade on the basis of inside information.
Insider trading is not the most important thing when it comes to long-term investments. Likewise, we would find it foolish to ignore insider trading altogether. For example, a Columbia University study found that “insiders are more likely to buy their own company’s stock in the open market when the company is about to announce new agreements with customers and suppliers.”
Check out our latest analysis for F5 Networks
The last 12 months of insider trading at F5 Networks
In the past year, we can see that the largest insider purchase was made by insider Thomas Fountain for $ 1.1 million worth of stock, at about $ 137 per share. That implies that an insider found the current price of $ 166 per share attractive. While their views may have changed since the purchase was made, at least it suggests they have confidence in the company’s future. We always like to see insider buying, but it’s worth noting that those purchases were made well below the current stock price as the discount in value may have diminished with the rising price. The good news for F5 Networks shareholders is that an insider bought at the current price. Thomas Fountain was the only individual insider to buy shares in the past twelve months.
The chart below shows insider trading (by companies and individuals) in the past year. If you click on the chart, you will see all the individual trades, including the stock price, individual trades and the date!
There are always plenty of stocks that insiders buy. So if that suits your style you can check out each stock one by one or you can look at this free list of companies. (Hint: insiders bought them).
Insider owned by F5 Networks
For a common shareholder, it’s worth checking out how many shares are owned by insiders of the company. Typically, the greater the insider holdings, the more likely it is that insiders will be incentivized to build the business for the long term. Insiders own 0.4% of the shares of F5 Networks, worth approximately US $ 45 million. While this is a strong but not excellent level of insider trading, it is sufficient to indicate that management and smaller shareholders are aligned.
So what do the F5 Networks insider transactions mean?
The fact that there haven’t been any insider transactions from F5 Networks lately certainly doesn’t bother us. In other words, last year’s transactions have been encouraging. Insiders own shares in F5 Networks and we see no indication that they are worried about the future. So, these insider trades can help us build a dissertation on the stock, but it’s also worth knowing the risks this company faces. For example – F5 Networks has 2 warning signs we think you should be aware of this.
Of course, you may find a great investment by looking elsewhere. So take a look here free list of interesting companies.
For the purposes of this article, insiders are those persons who report their transactions to the relevant regulatory authority. We are currently good for open market trades and retail trades, but not derivatives trades.
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This article from Simply Wall St is general in nature. It is not a recommendation to buy or sell stock, and does not take into account your goals or your financial situation. We strive to provide you with long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price sensitive company announcements or quality material. Simply Wall St has no exposure to said stocks.
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