With Rackspace Technology, Inc.’s (NASDAQ:RXT)) price down 3.5% this week, insiders might find some solace having sold US$4.1m worth of shares earlier this year.
Insiders seem to have made the most of their holdings by selling US$4.1m worth of Rackspace Technology, Inc. (NASDAQ:RXT) stock at an average sell price of US$21.00 during the past year. The company’s market cap plunged by US$99m after price dropped by 3.5% last week but insiders were able to limit their loss to an extent.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for Rackspace Technology
Rackspace Technology Insider Transactions Over The Last Year
The Independent Non-Employee Director, Dhiren Fonseca, made the biggest insider sale in the last 12 months. That single transaction was for US$2.5m worth of shares at a price of US$21.25 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$12.78). So it may not shed much light on insider confidence at current levels.
Happily, we note that in the last year insiders paid US$275k for 14.80k shares. But insiders sold 196.80k shares worth US$4.1m. Over the last year we saw more insider selling of Rackspace Technology shares, than buying. 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Rackspace Technology
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Rackspace Technology insiders own 9.2% of the company, currently worth about US$246m 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 Rackspace Technology Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Rackspace Technology insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Rackspace Technology. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Rackspace Technology.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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.
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