Don't Ignore The Insider Selling In Palladyne AI

We wouldn't blame Palladyne AI Corp. (NASDAQ:PDYN) shareholders if they were a little worried about the fact that Marc Olivier, a company insider, recently netted about US$7.0m selling shares at an average price of US$10.93. That's a big disposal, and it decreased their holding size by 37%, which is notable but not too bad.

See our latest analysis for Palladyne AI

Palladyne AI Insider Transactions Over The Last Year

Notably, that recent sale by Marc Olivier is the biggest insider sale of Palladyne AI shares that we've seen in the last year. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$10.31). So it is hard to draw any strong conclusion from it.

In the last twelve months insiders purchased 228.33k shares for US$380k. On the other hand they divested 1.75m shares, for US$13m. Over the last year we saw more insider selling of Palladyne AI shares, than buying. They sold for an average price of about US$7.22. It's not too encouraging to see that insiders have sold at below the current price. But we wouldn't put too much weight on the insider selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Palladyne AI insiders own about US$108m worth of shares (which is 30% of the company). 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 Palladyne AI Insider Transactions Indicate?

Insiders haven't bought Palladyne AI stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 4 warning signs for Palladyne AI (of which 2 are a bit concerning!) you should know about.

But note: Palladyne AI 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.