Some QUALCOMM Incorporated (NASDAQ:QCOM) shareholders may be a little concerned to see that the Chief Technology Officer, James Thompson, recently sold a whopping US$1.6m worth of stock at a price of US$91.47 per share. That sale reduced their total holding by 10% which is hardly insignificant, but far from the worst we’ve seen.
The Last 12 Months Of Insider Transactions At QUALCOMM
Over the last year, we can see that the biggest insider sale was by the Executive VP & President of Qualcomm Technology Licensing, Alexander Rogers, for US$1.8m worth of shares, at about US$88.43 per share. That means that even when the share price was slightly below the current price of US$89.60, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can’t be sure if it does mean insiders think the shares are fully valued, so it’s only a weak sign. It is worth noting that this sale was 65% of Alexander Rogers’s holding.
Over the last year, we can see that insiders have bought 3.21k shares worth US$242k. But insiders sold 79206 shares worth US$7.0m. In total, QUALCOMM insiders sold more than they bought over the last year. 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!
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For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. QUALCOMM insiders own about US$120m worth of shares (which is 0.1% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At QUALCOMM Tell Us?
The insider sales have outweighed the insider buying, at QUALCOMM, in the last three months. Zooming out, the longer term picture doesn’t give us much comfort. On the plus side, QUALCOMM makes money, and is growing profits. The company boasts high insider ownership, but we’re a little hesitant, given the history of share sales. Of course, the future is what matters most. So if you are interested in QUALCOMM, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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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