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Many Adobe Inc. (NASDAQ:ADBE) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
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.
View our latest analysis for Adobe
Adobe Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Co-Founder & Independent Director, John Warnock, for US$5.4m worth of shares, at about US$320 per share. That means that an insider was selling shares at slightly below the current price (US$342). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 4.0% of John Warnock's stake.
Over the last year, we can see that insiders have bought 5.42k shares worth US$1.8m. But they sold 41.08k shares for US$15m. All up, insiders sold more shares in Adobe than they bought, over the last year. The average sell price was around US$376. It's not particularly great to see insiders were selling shares at below recent prices. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. 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!
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).
Adobe Insiders Are Selling The Stock
We've seen more insider selling than insider buying at Adobe recently. In total, insiders sold US$7.6m worth of shares in that time. On the other hand we note insiders bought US$1.3m worth of shares. Generally this level of net selling might be considered a bit bearish.
Does Adobe Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Adobe insiders own 0.3% of the company, currently worth about US$400m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.