Onto Innovation Insiders Sell US$1.8m 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. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out 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. So it's clear an insider wanted to take some cash off the table, even below the current price of US$178. 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. We note that the biggest single sale was only 34% of David Miller's holding.

In the last year Onto Innovation insiders didn't buy any company stock. 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!

I will like Onto Innovation better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders At Onto Innovation Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Onto Innovation. Specifically, insider David Miller ditched US$477k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

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. Insiders own 0.7% of Onto Innovation shares, worth about US$65m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Onto Innovation Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. While insiders do own shares, they don't own a heap, and they have been selling. 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. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of 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.