We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Maxim Integrated Products, Inc. (NASDAQ:MXIM).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Maxim Integrated Products Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Vice President of Worldwide Sales & Marketing David Loftus sold US$733k worth of shares at a price of US$53.81 per share. That means that an insider was selling shares at slightly below the current price (US$54.96). While their view may have changed since they sold, this isn’t a particularly bullish sign. When an insider sells below the current price, it does tend to make us wonder about the current valuation. Please note, however, that this single sale was just 19.8% of David Loftus’s stake.
Over the last year, we note insiders sold 76.15k shares worth US$4.3m. In total, Maxim Integrated Products insiders sold more than they bought over the last year. The average sell price was around US$57.01. We don’t gain much confidence from insider selling near the recent share price. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Maxim Integrated Products better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Maxim Integrated Products Have Sold Stock Recently
The last quarter saw substantial insider selling of Maxim Integrated Products shares. In total, insiders sold US$1.3m 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.
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. We usually like to see fairly high levels of insider ownership. Insiders own 0.7% of Maxim Integrated Products shares, worth about US$98m. 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 Does This Data Suggest About Maxim Integrated Products Insiders?
Insiders haven’t bought Maxim Integrated Products stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn’t show any insider buying. On the plus side, Maxim Integrated Products makes money, and is growing profits. While insiders do own shares, they don’t own a heap, and they have been selling. We’d think twice before buying! Of course, the future is what matters most. So if you are interested in Maxim Integrated Products, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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