Onto Innovation Insiders Sell US$1.3m Of Stock, Possibly Signalling Caution

Onto Innovation Inc. (NYSE:ONTO) shareholders may have reason to be concerned, as several insiders sold their shares over the past year. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Onto Innovation

The Last 12 Months Of Insider Transactions At Onto Innovation

The insider, David Miller, made the biggest insider sale in the last 12 months. That single transaction was for US$498k worth of shares at a price of US$99.84 each. That means that even when the share price was below the current price of US$144, an insider wanted to cash in some shares. 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. 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. This single sale was just 34% of David Miller's stake.

Onto Innovation 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership Of Onto Innovation

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. It appears that Onto Innovation insiders own 0.7% of the company, worth about US$52m. 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 Onto Innovation 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 Onto Innovation insiders. But we do like the fact that insiders own a fair chunk of the company. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Onto Innovation.

Of course Onto Innovation 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.