Insiders At QUALCOMM Sold US$3.2m In Stock, Alluding To Potential Weakness

Many QUALCOMM Incorporated (NASDAQ:QCOM) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for QUALCOMM

QUALCOMM Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Chief Technology Officer of Qualcomm Technologies, James Thompson, sold US$1.2m worth of shares at a price of US$120 per share. That means that even when the share price was below the current price of US$170, an insider wanted to cash in some shares. 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 2.9% of James Thompson's holding.

QUALCOMM insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like QUALCOMM better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

QUALCOMM Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at QUALCOMM. Specifically, Chief Technology Officer of Qualcomm Technologies James Thompson ditched US$746k 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.

Does QUALCOMM Boast High Insider Ownership?

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. QUALCOMM insiders own 0.07% of the company, currently worth about US$130m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The QUALCOMM Insider Transactions Indicate?

An insider sold QUALCOMM shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But it is good to see that QUALCOMM is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

Of course QUALCOMM 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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