We wouldn't blame Snowflake Inc. (NYSE:SNOW) shareholders if they were a little worried about the fact that Jonathan Beaulier, a company insider, recently netted about US$2.2m selling shares at an average price of US$232. That sale reduced their total holding by 33% which is hardly insignificant, but far from the worst we've seen.

The Last 12 Months Of Insider Transactions At Snowflake

The Senior Vice President of Engineering & Support, Vivek Raghunathan, made the biggest insider sale in the last 12 months. That single transaction was for US$2.6m worth of shares at a price of US$223 each. That means that even when the share price was below the current price of US$249, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 16% of Vivek Raghunathan's stake.

Snowflake insiders didn't buy any shares over 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Snowflake insiders own 2.5% of the company, worth about US$2.0b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Snowflake Insiders?

An insider sold Snowflake shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Snowflake has 3 warning signs we think you should be aware of.

But note: Snowflake 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.