Over the past year, many Shopify Inc. (NYSE:SHOP) insiders sold a significant stake in the company which may have piqued investors' interest. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Shopify Insider Transactions Over The Last Year

They previously made a sale of -US$16m worth of shares at a price of US$70.27 per share. That means that an insider was selling shares at around the current price of US$64.69. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Insiders in Shopify didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Shopify 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.

Shopify Insiders Are Selling The Stock

The last three months saw some Shopify insider selling. Insiders only netted US$48k selling shares, in that period. It's not great to see insider selling, nor the lack of recent buyers. But the amount sold isn't enough for us to put any weight on it.

Insider Ownership

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 Shopify insiders own 6.3% of the company, worth about US$5.3b. 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 Shopify Tell Us?

Our data shows a little more insider selling, but no insider buying, in the last three months. But given the selling was modest, we're not worried. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Shopify insiders selling. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Shopify.

Of course Shopify 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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com