Insiders at Dolby Laboratories, Inc. (NYSE:DLB) must be relieved they sold stock as market valuation descends to US$7.8b

By
Simply Wall St
Published
April 12, 2022
NYSE:DLB
Source: Shutterstock

Insiders seem to have made the most of their holdings by selling US$483k worth of Dolby Laboratories, Inc. (NYSE:DLB) stock at an average sell price of US$100 during the past year. After the stock price dropped 3.1% last week, the company's market value declined by US$255m, but insiders were able to mitigate their losses.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Dolby Laboratories

The Last 12 Months Of Insider Transactions At Dolby Laboratories

In the last twelve months, the biggest single sale by an insider was when the Senior VP & Chief Marketing Officer, Todd Pendleton, sold US$275k worth of shares at a price of US$100 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$76.89. So it may not tell us anything about how insiders feel about the current share price.

In the last year Dolby Laboratories insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NYSE:DLB Insider Trading Volume April 12th 2022

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).

Insider Ownership of Dolby Laboratories

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Dolby Laboratories insiders own about US$49m worth of shares. That equates to 0.6% of the company. 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?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of Dolby Laboratories insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. While we like knowing 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. Case in point: We've spotted 1 warning sign for Dolby Laboratories you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.

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