From what we can see, insiders were net sellers in HubSpot, Inc.'s (NYSE:HUBS ) during the past 12 months. That is, insiders sold the stock in greater numbers than they purchased it.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for HubSpot
The Last 12 Months Of Insider Transactions At HubSpot
Notably, that recent sale by Dharmesh Shah is the biggest insider sale of HubSpot shares that we've seen in the last year. That means that an insider was selling shares at around the current price of US$468. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like HubSpot better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
HubSpot Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at HubSpot. In total, Co-Founder Dharmesh Shah sold US$7.1m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
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. HubSpot insiders own about US$949m worth of shares (which is 4.0% 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.
What Might The Insider Transactions At HubSpot Tell Us?
An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 2 warning signs with HubSpot and understanding these should be part of your investment process.
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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