Don't Ignore The Fact That This Insider Just Sold Some Shares In Analog Devices, Inc. (NASDAQ:ADI)

By
Simply Wall St
Published
May 24, 2022
NasdaqGS:ADI
Source: Shutterstock

We wouldn't blame Analog Devices, Inc. (NASDAQ:ADI) shareholders if they were a little worried about the fact that Prashanth Mahendra-Rajah, the Senior VP of Finance & CFO recently netted about US$636k selling shares at an average price of US$163. That sale reduced their total holding by 19% which is hardly insignificant, but far from the worst we've seen.

View our latest analysis for Analog Devices

Analog Devices Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Director Bruce Evans bought US$1.3m worth of shares at a price of US$165 per share. That means that an insider was happy to buy shares at above the current price of US$162. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Bruce Evans.

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!

insider-trading-volume
NasdaqGS:ADI Insider Trading Volume May 24th 2022

Analog Devices is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Analog Devices Boast High 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. Analog Devices insiders own 0.4% of the company, currently worth about US$297m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Analog Devices Insiders?

An insider sold stock recently, but they haven't been buying. But we take heart from prior transactions. We are also comforted by the high levels of insider ownership. So we're happy to look past recent trading. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Analog Devices. Every company has risks, and we've spotted 4 warning signs for Analog Devices you should know about.

But note: Analog Devices 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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