Cadence Design Systems Insiders Sold US$4.8m Of Shares Suggesting Hesitancy

The fact that multiple Cadence Design Systems, Inc. (NASDAQ:CDNS) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Cadence Design Systems

Cadence Design Systems Insider Transactions Over The Last Year

The Independent Director, Alberto Sangiovanni-Vincentelli, made the biggest insider sale in the last 12 months. That single transaction was for US$2.0m worth of shares at a price of US$230 each. That means that even when the share price was below the current price of US$292, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 11% of Alberto Sangiovanni-Vincentelli's holding.

Cadence Design Systems insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insiders At Cadence Design Systems Have Sold Stock Recently

The last three months saw significant insider selling at Cadence Design Systems. In total, Independent Director James Plummer sold US$761k 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 Cadence Design Systems

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Cadence Design Systems insiders own about US$661m worth of shares (which is 0.8% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Cadence Design Systems Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that Cadence Design Systems is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. Of course, the future is what matters most. So if you are interested in Cadence Design Systems, you should check out this free report on analyst forecasts for the company.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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