Don't Ignore The Insider Selling In Dolby Laboratories

Anyone interested in Dolby Laboratories, Inc. (NYSE:DLB) should probably be aware that the Independent Chairman, Peter Gotcher, recently divested US$480k worth of shares in the company, at an average price of US$78.96 each. That sale was 15% of their holding, so it does make us raise an eyebrow.

Check out our latest analysis for Dolby Laboratories

Dolby Laboratories Insider Transactions Over The Last Year

The Senior VP & Chief Marketing Officer, Todd Pendleton, made the biggest insider sale in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$81.69 each. That means that an insider was selling shares at around the current price of US$80.55. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. 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).

All up, insiders sold more shares in Dolby Laboratories than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Dolby Laboratories insiders own 0.5% of the company, worth about US$41m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Dolby Laboratories Tell Us?

An insider sold Dolby Laboratories shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Dolby Laboratories is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that Dolby Laboratories has 1 warning sign and it would be unwise to ignore it.

But note: Dolby Laboratories may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.