Insiders Who Sold US$3.3m Of Cadence Design Systems Made The Right Call \

Even though Cadence Design Systems, Inc. (NASDAQ:CDNS) stock gained 13% last week, insiders who sold US$3.3m worth of stock over the past year are probably better off. Selling at an average price of US$186, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

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.

View our latest analysis for Cadence Design Systems

Cadence Design Systems Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Alberto Sangiovanni-Vincentelli, sold US$1.9m worth of shares at a price of US$195 per share. That means that even when the share price was below the current price of US$231, 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. 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. This single sale was just 11% of Alberto Sangiovanni-Vincentelli's stake. Alberto Sangiovanni-Vincentelli was the only individual insider to sell over the last year.

Alberto Sangiovanni-Vincentelli sold a total of 17.55k shares over the year at an average price of US$186. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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

Does Cadence Design Systems Boast High Insider Ownership?

Many investors like to check how much of a company is owned by 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. Cadence Design Systems insiders own 1.0% of the company, currently worth about US$616m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Cadence Design Systems Insiders?

It doesn't really mean much that no insider has traded Cadence Design Systems shares in the last quarter. While we feel good about high insider ownership of Cadence Design Systems, we can't say the same about the selling of shares. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Cadence Design Systems.

Of course Cadence Design Systems 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, but not derivative transactions.

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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.