Power Integrations Insiders Sold US$16m Of Shares Suggesting Hesitancy

In the last year, many Power Integrations, Inc. (NASDAQ:POWI) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

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.

See our latest analysis for Power Integrations

The Last 12 Months Of Insider Transactions At Power Integrations

In the last twelve months, the biggest single sale by an insider was when the President, Balu Balakrishnan, sold US$3.7m worth of shares at a price of US$77.60 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$59.04. So it may not shed much light on insider confidence at current levels.

Power Integrations insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insiders At Power Integrations Have Sold Stock Recently

The last three months saw significant insider selling at Power Integrations. Specifically, insiders ditched US$151k 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.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Power Integrations insiders own 1.7% of the company, worth about US$58m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Power Integrations Tell Us?

Insiders sold Power Integrations shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Power Integrations. Case in point: We've spotted 1 warning sign for Power Integrations you should be aware of.

Of course Power Integrations may not be the best stock to buy. So you may wish to see this free collection of high quality 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 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.