Coherent Insiders Sell US$1.8m Of Stock, Possibly Signalling Caution

Over the past year, many Coherent Corp. (NYSE:COHR) insiders sold a significant stake in the company which may have piqued investors' interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

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.

View our latest analysis for Coherent

The Last 12 Months Of Insider Transactions At Coherent

Over the last year, we can see that the biggest insider sale was by the Independent Director, Michael Dreyer, for US$949k worth of shares, at about US$66.61 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$95.18. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was 54% of Michael Dreyer's stake.

Over the last year we saw more insider selling of Coherent shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insiders At Coherent Have Sold Stock Recently

We've seen more insider selling than insider buying at Coherent recently. We note Chief Legal & Compliance Officer and Company Secretary Ronald Basso cashed in US$369k worth of shares. Meanwhile CEO, President & Director James Anderson bought US$72k worth , as we said above . Generally this level of net selling might be considered a bit bearish.

Insider Ownership Of Coherent

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Coherent insiders own 0.8% of the company, worth about US$119m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Coherent Insiders?

Unfortunately, there has been more insider selling of Coherent stock, than buying, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.