Some Cisco Systems, Inc. (NASDAQ:CSCO) shareholders may be a little concerned to see that the Independent Director, Martha Burns, recently sold a substantial US$721k worth of stock at a price of US$51.55 per share. That sale reduced their total holding by 18% which is hardly insignificant, but far from the worst we’ve seen.
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The Last 12 Months Of Insider Transactions At Cisco Systems
In fact, the recent sale by Martha Burns was the biggest sale of Cisco Systems shares made by an insider individual in the last twelve months, according to our records. So it’s clear an insider wanted to take some cash off the table, even slightly below the current price of US$51.71. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can’t be sure if it does mean insiders think the shares are fully valued, so it’s only a weak sign. It is worth noting that this sale was only 18% of Martha Burns’s holding.
In the last year Cisco Systems insiders didn’t buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Cisco Systems
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. Insiders own 0.03% of Cisco Systems shares, worth about US$70m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Cisco Systems Tell Us?
An insider hasn’t bought Cisco Systems stock in the last three months, but there was some selling. And there weren’t any purchases to give us comfort, over the last year. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. So we’d only buy after careful consideration. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Cisco Systems 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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