Insiders Who Sold US$823k Of Semtech Made The Right Call

While it’s been a great week for Semtech Corporation (NASDAQ:SMTC) shareholders after stock gained 19%, they should consider it with a grain of salt. Even though stock prices were relatively low, insiders elected to sell US$823k worth of stock in the last year, which could indicate some expected downturn.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Semtech

The Last 12 Months Of Insider Transactions At Semtech

Over the last year, we can see that the biggest insider purchase was by insider Paul Walsh for US$497k worth of shares, at about US$24.83 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$35.90. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Over the last year, we can see that insiders have bought 21.00k shares worth US$530k. On the other hand they divested 34.23k shares, for US$823k. In total, Semtech insiders sold more than they bought 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!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Does Semtech Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 1.2% of Semtech shares, worth about US$32m. 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 Semtech Tell Us?

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 Semtech insiders. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Semtech. In terms of investment risks, we've identified 4 warning signs with Semtech and understanding them should be part of your investment process.

Of course Semtech 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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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.