Avid Technology, Inc.'s (NASDAQ:AVID) stock dropped 6.0% this week, offering solace to those who sold earlier in the year

By
Simply Wall St
Published
February 23, 2022
NasdaqGS:AVID
Source: Shutterstock

Avid Technology, Inc.'s (NASDAQ:AVID) value has fallen 6.0% in the last week, but insiders who sold US$2.3m worth of stock over the last year have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of US$24.89 is still lower than the current share price.

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 Avid Technology

Avid Technology Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Senior VP and GM of Audio & Music Solutions, Dana Ruzicka, for US$749k worth of shares, at about US$20.33 per share. That means that an insider was selling shares at slightly below the current price (US$29.86). 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 10% of Dana Ruzicka's stake.

Avid Technology insiders didn't buy any shares over the last year. 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!

insider-trading-volume
NasdaqGS:AVID Insider Trading Volume February 23rd 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 Avid Technology

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 7.3% of Avid Technology shares, worth about US$98m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Avid Technology Insider Transactions Indicate?

The fact that there have been no Avid Technology insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Avid Technology insiders. But it's good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Avid Technology. For example, Avid Technology has 2 warning signs (and 1 which is potentially serious) we think you should know about.

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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