Don't Ignore The Fact That This Insider Just Sold Some Shares In Power Integrations, Inc. (NASDAQ:POWI)

By
Simply Wall St
Published
February 16, 2022
NasdaqGS:POWI
Source: Shutterstock

We wouldn't blame Power Integrations, Inc. ( NASDAQ:POWI ) shareholders if they were a little worried about the fact that Balu Balakrishnan, the President recently netted about US$4.0m selling shares at an average price of US$85.11. That sale reduced their total holding by 11% which is hardly insignificant, but far from the worst we've seen.

See our latest analysis for Power Integrations

The Last 12 Months Of Insider Transactions At Power Integrations

In fact, the recent sale by Balu Balakrishnan was the biggest sale of Power Integrations shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at slightly below the current price (US$90.61). 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. We note that the biggest single sale was only 11% of Balu Balakrishnan's holding. It should also be noted that the shares were sold to settle tax obligations arising from the vesting of equity grants.

Insiders in Power Integrations didn't buy any shares in 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:POWI Insider Trading Volume February 16th 2022

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

Does Power Integrations Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Power Integrations insiders own 1.8% of the company, worth about US$98m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Power Integrations Insider Transactions Indicate?

Insiders sold Power Integrations shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But it is good to see that Power Integrations is growing earnings. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! 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. You'd be interested to know, that we found 1 warning sign for Power Integrations and we suggest you have a look.

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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