Some Bandwidth Inc. (NASDAQ:BAND) shareholders may be a little concerned to see that the General Counsel & Secretary, Richard Asbill, recently sold a substantial US$883k worth of stock at a price of US$44.15 per share. That sale reduced their total holding by 42% which is hardly insignificant, but far from the worst we've seen.

The Last 12 Months Of Insider Transactions At Bandwidth

In fact, the recent sale by Richard Asbill was the biggest sale of Bandwidth 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$48.65). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. 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. We note that the biggest single sale was only 42% of Richard Asbill's holding.

Insiders in Bandwidth didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart 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

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 6.4% of Bandwidth shares, worth about US$96m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Bandwidth Insider Transactions Indicate?

Insiders haven't bought Bandwidth stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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 Bandwidth is showing 2 warning signs in our investment analysis, and 1 of those is a bit unpleasant...

But note: Bandwidth may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 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.