Monolithic Power Systems Insiders Sell US$147m Of Stock, Possibly Signalling Caution

Many Monolithic Power Systems, Inc. (NASDAQ:MPWR) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Monolithic Power Systems

The EVP of Strategic Corporate Development, Saria Tseng, made the biggest insider sale in the last 12 months. That single transaction was for US$32m worth of shares at a price of US$825 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$736). So it may not tell us anything about how insiders feel about the current share price.

Insiders in Monolithic Power Systems 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!

See our latest analysis for Monolithic Power Systems

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Insiders At Monolithic Power Systems Have Sold Stock Recently

The last quarter saw substantial insider selling of Monolithic Power Systems shares. Specifically, insiders ditched US$8.6m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Monolithic Power Systems Boast High Insider Ownership?

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's great to see that Monolithic Power Systems insiders own 3.4% of the company, worth about US$1.2b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Monolithic Power Systems Insider Transactions Indicate?

Insiders sold Monolithic Power Systems shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But since Monolithic Power Systems is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 3 warning signs for Monolithic Power Systems (2 can't be ignored) you should be aware of.

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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.