Some Open Text Corporation (NASDAQ:OTEX) shareholders may be a little concerned to see that the Independent Director, Michael Slaunwhite, recently sold a substantial US$7.2m worth of stock at a price of US$28.82 per share. That's a big disposal, and it decreased their holding size by 38%, which is notable but not too bad.
Open Text Insider Transactions Over The Last Year
The Vice Chairman, Mark Barrenechea, made the biggest insider sale in the last 12 months. That single transaction was for US$16m worth of shares at a price of US$41.30 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$27.70. So it may not tell us anything about how insiders feel about the current share price.
Over the last year, we can see that insiders have bought 11.53k shares worth US$443k. But insiders sold 996.31k shares worth US$38m. Over the last year we saw more insider selling of Open Text shares, than buying. 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!
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Insider Ownership Of Open Text
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It's great to see that Open Text insiders own 2.0% of the company, worth about US$153m. 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 Open Text Tell Us?
Insiders haven't bought Open Text stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. Our analysis shows 5 warning signs for Open Text (1 is a bit unpleasant!) and we strongly recommend you look at them before investing.
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.