Possible Bearish Signals With Lam Research Insiders Disposing Stock \

The fact that multiple Lam Research Corporation (NASDAQ:LRCX) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Lam Research

The Last 12 Months Of Insider Transactions At Lam Research

Over the last year, we can see that the biggest insider sale was by the Executive VP & CFO, Douglas Bettinger, for US$10m worth of shares, at about US$443 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$628. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 20% of Douglas Bettinger's holding.

Lam Research insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Lam Research better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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. Lam Research insiders own 0.3% of the company, currently worth about US$284m 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 Do The Lam Research Insider Transactions Indicate?

The fact that there have been no Lam Research insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Lam Research, we can't say the same about the selling of shares. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Lam Research.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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. 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.