Possible Bearish Signals With IPG Photonics Insiders Disposing Stock

Over the past year, many IPG Photonics Corporation (NASDAQ:IPGP) 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, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

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.

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IPG Photonics Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Director & Advisor, Eugene Scherbakov, sold US$558k worth of shares at a price of US$66.28 per share. That means that an insider was selling shares at around the current price of US$65.91. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

IPG Photonics insiders didn't buy any shares over the last year. 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!

Check out our latest analysis for IPG Photonics

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IPG Photonics Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at IPG Photonics. In total, insiders sold US$870k 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 IPG Photonics Boast High Insider Ownership?

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. We usually like to see fairly high levels of insider ownership. It's great to see that IPG Photonics insiders own 3.5% of the company, worth about US$102m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At IPG Photonics Tell Us?

Insiders sold IPG Photonics shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that IPG Photonics has 1 warning sign and it would be unwise to ignore this.

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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.