We wouldn't blame Gen Digital Inc. (NASDAQ:GEN) shareholders if they were a little worried about the fact that Vincent Pilette, the CEO, President & Director recently netted about US$4.6m selling shares at an average price of US$25.54. However, that sale only accounted for 8.9% of their holding, so arguably it doesn't say much about their conviction.

Gen Digital Insider Transactions Over The Last Year

Notably, that recent sale by Vincent Pilette is the biggest insider sale of Gen Digital shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$25.72. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 8.9% of Vincent Pilette's stake.

In the last year Gen Digital insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Gen Digital better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Gen Digital Boast High 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. Gen Digital insiders own 9.2% of the company, currently worth about US$1.4b 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 Does This Data Suggest About Gen Digital Insiders?

An insider hasn't bought Gen Digital stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. When we did our research, we found 5 warning signs for Gen Digital (1 is significant!) that we believe deserve your full attention.

Of course Gen Digital 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.

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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.