Insiders at HP sold $5.0 million worth of shares, pointing to potential weakness

Many last year HP Inc. (NYSE:HPQ) insiders sold a significant stake in the company, which may have caught the attention of shareholders. When evaluating insider transactions, it is usually more advantageous to know whether insiders are buying than to know whether they are selling, as the latter can be open to many interpretations. However, when a large number of insiders are selling, shareholders should investigate further.

While insider transactions aren't the most important thing when it comes to long-term investing, it's logical that you should pay attention to whether insiders are buying or selling stocks.

Check out our latest analysis for HP

HP insider transactions in the last year

Independent director Robert Bennett made the biggest insider sale of the last 12 months. This single transaction involved $2.0 million worth of shares at a price of $30.01 each. So it's clear that an insider wanted to take some money off the table, even below the current price of $36.97. Generally, we think it's discouraging to see insiders selling below the current price, as it suggests they were happy with a lower valuation. While insider selling is sometimes discouraging, it is still a weak signal. This individual sale amounted to 53% of Robert Bennett's shareholding.

HP insiders haven't bought any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold how much and when, just click on the graphic below!

If you're like me, then you will not I want to miss this free List of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider ownership of HP

Many investors like to check how much of a company is owned by insiders. We typically like to see relatively high levels of insider ownership. HP insiders own shares worth around $72 million. This corresponds to 0.2% of the company. This level of insider ownership is good, but not particularly outstanding. It certainly suggests a reasonable level of alignment.

What could HP's insider transactions tell us?

The fact that there have been no HP insider transactions recently certainly doesn't bother us. The transactions from HP insiders don't exactly encourage us. However, we like the fact that insiders own a significant portion of the company. So these insider transactions can help us form a thesis about the stock, but it's also worth knowing the risks this company faces. For example, HP has 3 warning signs (and 1 that shouldn't be ignored) we think you should know.

But note: HP may not be the best stock to buy. So take a look free List of interesting companies with high ROE and low debt.

Insiders within the meaning of this article are persons who report their transactions to the relevant supervisory authority. We currently only consider open market transactions and private dispositions of direct holdings, but not derivative transactions or indirect holdings.

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This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term focused analysis based on fundamental data. Note that our analysis may not reflect the latest price-sensitive company announcements or qualitative material. Simply Wall St has no positions in any stocks mentioned.