Shareholders Can't Ignore US$15m Of Sales By SkyWater Technology Insiders

Despite a 14% gain in SkyWater Technology, Inc.'s (NASDAQ:SKYT) stock price this week, shareholders shouldn't let up. Although prices were relatively low, insiders chose to sell US$15m worth of stock in the past 12 months. This could be a sign of impending weakness.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for SkyWater Technology

SkyWater Technology Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Bart Zibrowski, for US$1.3m worth of shares, at about US$13.40 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$8.03). So it may not tell us anything about how insiders feel about the current share price.

SkyWater Technology insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and 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!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. We usually like to see fairly high levels of insider ownership. Insiders own 26% of SkyWater Technology shares, worth about US$95m. 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 SkyWater Technology Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. We don't take much encouragement from the transactions by SkyWater Technology insiders. But we do like the fact that insiders own a fair chunk of the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that SkyWater Technology has 2 warning signs and it would be unwise to ignore them.

But note: SkyWater Technology 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.