Insider Sellers Might Regret Selling STMicroelectronics Shares at a Lower Price Than Current Market Value

STMicroelectronics N.V.'s (EPA:STMPA) value has fallen 16% in the last week, but insiders who sold US$2.5m worth of stock over the last year have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of US$39.27 is still lower than the current share price.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At STMicroelectronics

The Chairman of the Managing Board, Jean-Marc Chery, made the biggest insider sale in the last 12 months. That single transaction was for €1.9m worth of shares at a price of €38.50 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is €16.88. So it may not shed much light on insider confidence at current levels.

Insiders in STMicroelectronics didn't buy any shares in 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!

View our latest analysis for STMicroelectronics

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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. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, STMicroelectronics insiders have about 0.008% of the stock, worth approximately €1.2m. But they may have an indirect interest through a corporate structure that we haven't picked up on. I generally like to see higher levels of ownership.

So What Does This Data Suggest About STMicroelectronics Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. The insider transactions at STMicroelectronics are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. 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 2 warning signs that you should run your eye over to get a better picture of STMicroelectronics.

But note: STMicroelectronics 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 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.