Some Cerence Inc. (NASDAQ:CRNC) shareholders may be a little concerned to see that the Chief Financial Officer, Mark Gallenberger, recently sold a substantial US$1.2m worth of stock at a price of US$69.43 per share. That sale reduced their total holding by 15% which is hardly insignificant, but far from the worst we've seen.
Cerence Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the CEO & Director, Sanjay Dhawan, for US$2.0m worth of shares, at about US$62.25 per share. That means that even when the share price was below the current price of US$84.07, an insider wanted to cash in some shares. 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. 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. It is worth noting that this sale was only 7.4% of Sanjay Dhawan's holding.
In the last year Cerence insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Cerence insiders own about US$82m worth of shares. That equates to 2.6% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Cerence Tell Us?
Insiders haven't bought Cerence stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Cerence. While conducting our analysis, we found that Cerence has 3 warning signs and it would be unwise to ignore them.
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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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