Some Cogent Communications Holdings, Inc. (NASDAQ:CCOI) shareholders may be a little concerned to see that the Founder, David Schaeffer, recently sold a substantial US$4.4m worth of stock at a price of US$72.82 per share. However, that sale only accounted for 1.4% of their holding, so arguably it doesn't say much about their conviction.
Cogent Communications Holdings Insider Transactions Over The Last Year
In fact, the recent sale by Founder David Schaeffer was not their only sale of Cogent Communications Holdings shares this year. They previously made an even bigger sale of -US$5.8m worth of shares at a price of US$68.12 per share. That means that an insider was selling shares at slightly below the current price (US$70.17). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. 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. It is worth noting that this sale was only 1.8% of David Schaeffer's holding.
In total, Cogent Communications Holdings insiders sold more than they bought over the last year. 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 Cogent Communications Holdings better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insider Ownership Of Cogent Communications Holdings
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Cogent Communications Holdings insiders own 11% of the company, currently worth about US$356m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Cogent Communications Holdings Insiders?
The stark truth for Cogent Communications Holdings is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. To that end, you should learn about the 6 warning signs we've spotted with Cogent Communications Holdings (including 4 which make us uncomfortable).
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.