Yahoo Finance Selling US$7.9m Of Stock Was Lucrative Decision For Marvell Technology Insiders
Despite the fact that Marvell Technology, Inc. (NASDAQ:MRVL) stock rose 12% last week, insiders who sold US$7.9m worth of stock in the previous 12 months are likely to be better off. Selling at an average price of US$61.62, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Marvell Technology
The Last 12 Months Of Insider Transactions At Marvell Technology
The Independent Director, Fouad Tamer, made the biggest insider sale in the last 12 months. That single transaction was for US$5.4m worth of shares at a price of US$59.58 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$69.62. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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. It is worth noting that this sale was only 14% of Fouad Tamer's holding.
Insiders in Marvell Technology didn't buy any shares in the last year. 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Marvell Technology Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Marvell Technology shares. In total, President Matthew Murphy sold US$1.7m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership Of Marvell Technology
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. Marvell Technology insiders own 0.6% of the company, currently worth about US$336m 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.
What Might The Insider Transactions At Marvell Technology Tell Us?
An insider hasn't bought Marvell Technology stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Marvell Technology. Case in point: We've spotted 1 warning sign for Marvell Technology you should be aware of.
Of course Marvell Technology 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.
