We wouldn't blame F5, Inc. (NASDAQ:FFIV) shareholders if they were a little worried about the fact that Nikhil Mehta, the Independent Director recently netted about US$1.6m selling shares at an average price of US$389. That's a big disposal, and it decreased their holding size by 36%, which is notable but not too bad.

F5 Insider Transactions Over The Last Year

In fact, the recent sale by Nikhil Mehta was the biggest sale of F5 shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at slightly below the current price (US$412). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 36% of Nikhil Mehta's holding.

Insiders in F5 didn't buy any shares in 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!

If you are like me, then you will not 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

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. F5 insiders own about US$173m worth of shares (which is 0.7% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The F5 Insider Transactions Indicate?

Insiders haven't bought F5 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. But since F5 is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company.

Of course F5 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.

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.