Independent Director Of Rambus Sold 28% Of Their Shares

We wouldn't blame Rambus Inc. (NASDAQ:RMBS) shareholders if they were a little worried about the fact that Eric Stang, the Independent Director recently netted about US$643k selling shares at an average price of US$56.37. That sale reduced their total holding by 28% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for Rambus

The Last 12 Months Of Insider Transactions At Rambus

Over the last year, we can see that the biggest insider sale was by the Senior VP & COO, Xianzhi Fan, for US$952k worth of shares, at about US$54.99 per share. That means that an insider was selling shares at below the current price (US$55.92). 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 only 9.3% of Xianzhi Fan's holding.

Rambus 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!

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Does Rambus Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Rambus insiders own about US$34m worth of shares. That equates to 0.6% of the company. 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 Rambus Tell Us?

An insider hasn't bought Rambus stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that Rambus is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. 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. At Simply Wall St, we've found that Rambus has 3 warning signs (2 are concerning!) that deserve your attention before going any further with your analysis.

But note: Rambus may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 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.