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Should You Take Comfort From Insider Transactions At Cloudera, Inc. (NYSE:CLDR)?

We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Cloudera, Inc. (NYSE:CLDR).

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year’.

Check out our latest analysis for Cloudera

Cloudera Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Director Peter Fenton for US$5.0m worth of shares, at about US$6.95 per share. We do like to see buying, but this purchase was made at well below the current price of US$10.09. Because the shares were purchased at a lower price, this particular buy doesn’t tell us much about how insiders feel about the current share price.

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

Cloudera is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 1.9% of Cloudera shares, worth about US$58m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Cloudera Insider Transactions Indicate?

It doesn’t really mean much that no insider has traded Cloudera shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in Cloudera and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Cloudera has 3 warning signs and it would be unwise to ignore these.

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, but not derivative transactions.

This article by Simply Wall St is general in nature. 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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