Some VeriSign, Inc. (NASDAQ:VRSN) shareholders may be a little concerned to see that the Executive VP of Technology & Chief Security Officer, Danny McPherson, recently sold a substantial US$1.4m worth of stock at a price of US$271 per share. That sale reduced their total holding by 31% which is hardly insignificant, but far from the worst we've seen.
VeriSign Insider Transactions Over The Last Year
The Executive Chairman, D. Bidzos, made the biggest insider sale in the last 12 months. That single transaction was for US$2.6m worth of shares at a price of US$291 each. So we know that an insider sold shares at around the present share price of US$269. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
Over the last year, we can see that insiders have bought 112.72 shares worth US$29k. But insiders sold 157.20k shares worth US$42m. All up, insiders sold more shares in VeriSign than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
See our latest analysis for VeriSign
I will like VeriSign better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Does VeriSign Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that VeriSign insiders own 0.5% of the company, worth about US$137m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The VeriSign Insider Transactions Indicate?
The stark truth for VeriSign is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that VeriSign is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. Be aware that VeriSign is showing 3 warning signs in our investment analysis, and 1 of those is potentially serious...
Of course VeriSign 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 of direct interests only, but not derivative transactions or indirect interests.
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