In This Article:
Despite a 13% gain in eBay Inc.'s (NASDAQ:EBAY) stock price this week, shareholders shouldn't let up. Although prices were relatively low, insiders chose to sell US$3.3m worth of stock in the past 12 months. This could be a sign of impending weakness.
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 eBay
The Last 12 Months Of Insider Transactions At eBay
In the last twelve months, the biggest single sale by an insider was when the insider, Marie Huber, sold US$2.4m worth of shares at a price of US$49.63 per share. That means that an insider was selling shares at slightly below the current price (US$69.40). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 22% of Marie Huber's holding.
eBay insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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: Most of them are flying under the radar).
Insiders At eBay Have Sold Stock Recently
The last quarter saw substantial insider selling of eBay shares. In total, VP, Chief Accounting Officer & Principal Accounting Officer Rebecca Spencer dumped US$113k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Does eBay Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. eBay insiders own 0.3% of the company, currently worth about US$100m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.