Insider Buying: The Netflix, Inc. (NASDAQ:NFLX) Co-Founder Just Bought 1.0% More Shares

Simply Wall St
·2 min read

Netflix, Inc. (NASDAQ:NFLX) shareholders (or potential shareholders) will be happy to see that the Co-Founder, Wilmot Hastings, recently bought a whopping US$20m worth of stock, at a price of US$389. While that only increased their holding size by 1.0%, it is still a big swing by our standards.

Check out our latest analysis for Netflix

Netflix Insider Transactions Over The Last Year

Notably, that recent purchase by Wilmot Hastings is the biggest insider purchase of Netflix shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of US$384. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Wilmot Hastings was the only individual insider to buy during the last year.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
insider-trading-volume

Netflix is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. Netflix insiders own about US$2.2b worth of shares (which is 1.3% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Netflix Insider Transactions Indicate?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Netflix. That's what I like to see! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Netflix. Case in point: We've spotted 3 warning signs for Netflix you should be aware of, and 2 of them make us uncomfortable.

But note: Netflix 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, but not derivative transactions.

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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.