Despite the fact that Envestnet, Inc. (NYSE:ENV) stock rose 11% last week, insiders who sold US$688k worth of stock in the previous 12 months are likely to be better off.  Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of US$54.44, which is higher than the current price, may have been the best decision.    

Although we don't think shareholders should simply follow insider transactions,  we do think it is perfectly logical to keep tabs on what insiders are doing.

The Last 12 Months Of Insider Transactions At Envestnet

The insider, William Crager, made the biggest insider sale in the last 12 months. That single transaction was for US$389k worth of shares at a price of US$53.68 each.    That means that even when the share price was below the current price of US$63.33, an insider wanted to cash in some shares.  We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable.  Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price.   We note that the biggest single sale was only 2.7% of William Crager's holding.    

In total, Envestnet insiders sold more than they bought over the last year.    The chart below shows insider transactions (by companies and individuals) over the last year.  If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

NYSE:ENV Insider Trading Volume April 21st 2024

I will like Envestnet better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Envestnet Insiders Are Selling The Stock  

The last three months saw some Envestnet insider selling.     Senior Vice President of Financial Reporting  Matthew Majoros  only netted US$40k selling shares, in that period.  Neither the lack of buying nor the presence of selling is heartening.  But the amount sold isn't enough for us to put any weight on it.  

Insider Ownership Of Envestnet

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own.  Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term.   It appears that Envestnet insiders own 1.1% of the company, worth about US$37m.  We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.  

So What Do The Envestnet Insider Transactions Indicate?

We did not see any insider buying in the last three months, but we did see selling.  However, the sales are not big enough to concern us at all.       Recent insider selling makes us a little nervous, in light of the broader picture of Envestnet insider transactions.   But we do like the fact that insiders own a fair chunk of the company.      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, 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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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.