Insider Sales At GSI Technology Landed A Good Price

Last week, GSI Technology, Inc.'s (NASDAQ:GSIT) stock jumped 16%, but insiders who sold US$179k worth of stock in over the past year are likely to be in a better position. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of US$3.31, which is higher than the current price, may have been the best decision.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for GSI Technology

GSI Technology Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Co-Founder, Robert Yau, for US$88k worth of shares, at about US$3.27 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$4.08. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 2.9% of Robert Yau's holding. Robert Yau was the only individual insider to sell shares in the last twelve months.

Robert Yau sold a total of 54.00k shares over the year at an average price of US$3.31. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insider Ownership Of GSI Technology

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that GSI Technology insiders own 26% of the company, worth about US$25m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The GSI Technology Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. We don't take much encouragement from the transactions by GSI Technology insiders. The modest level of insider ownership is, at least, some comfort. While we like knowing 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. Be aware that GSI Technology is showing 4 warning signs in our investment analysis, and 2 of those are a bit unpleasant...

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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.