Trade Alert: Independent Director Of Semtech Rodolpho Cardenuto Has Sold Stock

We wouldn't blame Semtech Corporation (NASDAQ:SMTC) shareholders if they were a little worried about the fact that Rodolpho Cardenuto, the Independent Director recently netted about US$549k selling shares at an average price of US$41.82. That diminished their holding by a very significant 100%, which arguably implies a strong desire to reallocate capital.

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Semtech Insider Transactions Over The Last Year

Notably, that recent sale by Rodolpho Cardenuto is the biggest insider sale of Semtech shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$41.88. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was 100% of Rodolpho Cardenuto's holding.

In the last year Semtech insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for Semtech

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Does Semtech 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. Semtech insiders own about US$43m worth of shares. That equates to 1.2% of the company. 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 Semtech Insider Transactions Indicate?

Insiders sold Semtech shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Semtech you should be aware of, and 1 of these is significant.

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.