Have Ambarella, Inc. (NASDAQ:AMBA) Insiders Been Selling Their Stock?

By
Simply Wall St
Published
July 01, 2021
NasdaqGS:AMBA
Source: Shutterstock

We wouldn't blame Ambarella, Inc. (NASDAQ:AMBA) shareholders if they were a little worried about the fact that Yun-Lung Chen, a company insider, recently netted about US$619k selling shares at an average price of US$104. That's a big disposal, and it decreased their holding size by 10%, which is notable but not too bad.

Check out our latest analysis for Ambarella

The Last 12 Months Of Insider Transactions At Ambarella

In fact, the recent sale by Yun-Lung Chen was the biggest sale of Ambarella shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was below the current price of US$107, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 10% of Yun-Lung Chen's holding.

Ambarella insiders didn't buy any shares over 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!

insider-trading-volume
NasdaqGS:AMBA Insider Trading Volume July 1st 2021

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Ambarella insiders own 4.8% of the company, worth about US$187m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Ambarella Tell Us?

Insiders sold Ambarella shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Ambarella. For example - Ambarella has 2 warning signs we think you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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This article by Simply Wall St is general in nature. 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.
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