Don't Ignore The Insider Selling In Vicor

Anyone interested in Vicor Corporation (NASDAQ:VICR) should probably be aware that the Independent Director, Estia Eichten, recently divested US$444k worth of shares in the company, at an average price of US$55.51 each. However, the silver lining is that the sale only reduced their total holding by 3.4%, so we're hesitant to read anything much into it, on its own.

See our latest analysis for Vicor

Vicor Insider Transactions Over The Last Year

Notably, that recent sale by Estia Eichten is the biggest insider sale of Vicor shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of US$58.00. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 3.4% of Estia Eichten's holding.

Insiders in Vicor didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Vicor 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.

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. It's great to see that Vicor insiders own 49% of the company, worth about US$1.2b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Vicor Tell Us?

Insiders sold Vicor shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. For example - Vicor has 3 warning signs we think you should be aware of.

But note: Vicor 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.