Dolby Laboratories Insiders Sell US$2.7m Of Stock, Possibly Signalling Caution

Over the past year, many Dolby Laboratories, Inc. (NYSE:DLB) insiders sold a significant stake in the company which may have piqued investors' interest. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Dolby Laboratories Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Executive VP, Andy Sherman, sold US$963k worth of shares at a price of US$78.22 per share. That means that an insider was selling shares at around the current price of US$75.43. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Insiders in Dolby Laboratories didn't buy any shares in 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!

See our latest analysis for Dolby Laboratories

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Dolby Laboratories Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Dolby Laboratories. Specifically, insiders ditched US$77k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Dolby Laboratories Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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 Dolby Laboratories insiders own 0.6% of the company, worth about US$42m. 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 Dolby Laboratories Tell Us?

Insiders sold Dolby Laboratories shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that Dolby Laboratories is growing earnings. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Dolby Laboratories.

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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.