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Insiders At Adobe Sold US$17m In Stock, Alluding To Potential Weakness \

Over the past year, many Adobe Inc. (NASDAQ:ADBE) insiders sold a significant stake in the company which may have piqued investors' interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Adobe

The Last 12 Months Of Insider Transactions At Adobe

In the last twelve months, the biggest single sale by an insider was when the Co-Founder & Independent Director, John Warnock, sold US$5.4m worth of shares at a price of US$320 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$335. 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. 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. This single sale was just 4.0% of John Warnock's stake.

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Happily, we note that in the last year insiders paid US$1.3m for 4.45k shares. But insiders sold 51.80k shares worth US$17m. All up, insiders sold more shares in Adobe than they bought, 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
insider-trading-volume

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Adobe Insiders Are Selling The Stock

The last three months saw significant insider selling at Adobe. In total, Co-Founder & Independent Director John Warnock sold US$1.6m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Adobe insiders own 0.3% of the company, worth about US$395m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Adobe Tell Us?

An insider hasn't bought Adobe stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Adobe makes money, and is growing profits. 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. 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. Case in point: We've spotted 1 warning sign for Adobe you should be aware of.

Of course Adobe 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, but not derivative transactions.

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.

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