CRNC

Don't Ignore The Fact That This Insider Just Sold Some Shares In Cerence Inc. (NASDAQ:CRNC)

Some Cerence Inc. (NASDAQ:CRNC) shareholders may be a little concerned to see that the CEO & Director, Sanjay Dhawan, recently sold a substantial US$6.8m worth of stock at a price of US$103 per share. That's a big disposal, and it decreased their holding size by 19%, which is notable but not too bad.

Cerence Insider Transactions Over The Last Year

Notably, that recent sale by Sanjay Dhawan is the biggest insider sale of Cerence shares that we've seen in the last year. That means that an insider was selling shares at below the current price (US$104). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 19%of Sanjay Dhawan's holding.

Cerence 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!

insider-trading-volume
NasdaqGS:CRNC Insider Trading Volume November 20th 2021

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Cerence Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Cerence insiders own about US$53m worth of shares. That equates to 1.3% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Cerence Insiders?

Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. 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. For example - Cerence has 2 warning signs we think you should be aware of.

Of course Cerence 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, but not derivative transactions.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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