Insider Traders Lose US$82k As Magnachip Semiconductor Drops

Insiders who bought US$337.9k worth of Magnachip Semiconductor Corporation's (NYSE:MX) stock at an average buy price of US$3.38 over the last year may be disappointed by the recent 16% decrease in the stock. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$256.0k, which is not great.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

The Last 12 Months Of Insider Transactions At Magnachip Semiconductor

The Chairman of the Board & CEO Camillo Martino made the biggest insider purchase in the last 12 months. That single transaction was for US$85k worth of shares at a price of US$2.84 each. That means that even when the share price was higher than US$2.56 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months Magnachip Semiconductor insiders were buying shares, but not selling. They paid about US$3.38 on average. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

See our latest analysis for Magnachip Semiconductor

Magnachip Semiconductor is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Magnachip Semiconductor Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Magnachip Semiconductor. Overall, two insiders shelled out US$114k for shares in the company -- and none sold. That shows some optimism about the company's future.

Insider Ownership Of Magnachip Semiconductor

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. Insiders own 5.7% of Magnachip Semiconductor shares, worth about US$5.8m, according to our data. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Magnachip Semiconductor Insiders?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Magnachip Semiconductor insiders are expecting a bright future. While it's good to be aware of 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. Every company has risks, and we've spotted 1 warning sign for Magnachip Semiconductor you should know about.

Of course Magnachip Semiconductor 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.