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 shareholders might well want to know whether insiders have been buying or selling shares in Pixelworks, Inc. (NASDAQ:PXLW).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
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'.
The Last 12 Months Of Insider Transactions At Pixelworks
Director David Tupman made the biggest insider purchase in the last 12 months. That single transaction was for US$101k worth of shares at a price of US$3.36 each. That implies that an insider found the current price of US$3.66 per share to be enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Pixelworks insiders decided to buy shares at close to current prices.
In the last twelve months Pixelworks insiders were buying shares, but not selling. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Pixelworks is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Have Pixelworks Insiders Traded Recently?
Over the last three months, we've seen a bit of insider buying at Pixelworks. Executive Officer Steven Moore bought US$7.8k worth of shares in that time. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.
Insider Ownership of Pixelworks
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 14% of Pixelworks shares, worth about US$19m. 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 Pixelworks Insider Transactions Indicate?
We note a that there has been a bit of insider buying recently (but no selling). Overall the buying isn't worth writing home about. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Pixelworks insiders are doubting the company, and they do own shares. Of course, the future is what matters most. So if you are interested in Pixelworks, you should check out this free report on analyst forecasts for the company.
Of course Pixelworks 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, but not derivative transactions.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.