Multiple insiders secured a larger position in Snowflake Inc. (NYSE:SNOW) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Snowflake

The Last 12 Months Of Insider Transactions At Snowflake

In the last twelve months, the biggest single purchase by an insider was when Lead Independent Director Michael Speiser bought US$10.0m worth of shares at a price of US$131 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$152. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months insiders purchased 107.74k shares for US$15m. But they sold 29.71k shares for US$4.4m. In the last twelve months there was more buying than selling by Snowflake insiders. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Snowflake Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Snowflake. In total, Chief Accounting Officer Emily Ho sold US$246k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Snowflake insiders own 4.4% of the company, currently worth about US$2.2b based on the recent share price. 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 Do The Snowflake Insider Transactions Indicate?

An insider hasn't bought Snowflake stock in the last three months, but there was some selling. But we take heart from prior transactions. And insider ownership remains quite considerable. So we're not too bothered by recent selling. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Snowflake.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

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

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.