Possible bearish signals as Adobe Inc. (NASDAQ:ADBE) insiders disposed of US$15m worth of stock

The fact that multiple Adobe Inc. (NASDAQ:ADBE) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Adobe

The Last 12 Months Of Insider Transactions At Adobe

The Co-Founder & Independent Director, John Warnock, made the biggest insider sale in the last 12 months. That single transaction was for US$5.4m worth of shares at a price of US$320 each. So what is clear is that an insider saw fit to sell at around the current price of US$299. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

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. In total, Adobe insiders sold more than they bought over the last year. The sellers received a price of around US$376, on average. We are not joyful about insider selling. However, we do note that the average sale price was significantly higher than the current share price (which is US$299). The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Adobe better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders At Adobe Have Sold Stock Recently

There was substantially more insider selling, than buying, of Adobe shares over the last three months. In that time, insiders dumped US$7.6m worth of shares. Meanwhile insiders bought US$1.3m worth. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.

Insider Ownership Of Adobe

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Adobe insiders own 0.3% of the company, currently worth about US$349m 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.

What Might The Insider Transactions At Adobe Tell Us?

Unfortunately, there has been more insider selling of Adobe stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Adobe. At Simply Wall St, we found 1 warning sign for Adobe that deserve your attention before buying any shares.

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.

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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