Some Diodes Incorporated (NASDAQ:DIOD) shareholders may be a little concerned to see that the Chairman & CEO, Keh-Shew Lu, recently sold a substantial US$673k worth of stock at a price of US$67.20 per share. However, that sale only accounted for 3.4% of their holding, so arguably it doesn't say much about their conviction.

The Last 12 Months Of Insider Transactions At Diodes

Notably, that recent sale by Chairman & CEO Keh-Shew Lu was not the only time they sold Diodes shares this year. They previously made an even bigger sale of -US$1.2m worth of shares at a price of US$73.93 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$66.97. So it is hard to draw any strong conclusion from it.

Diodes insiders didn't buy any shares over the last year. 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.

Does Diodes Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Diodes insiders own 2.0% of the company, worth about US$63m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Diodes Tell Us?

Insiders haven't bought Diodes stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. 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. Case in point: We've spotted 2 warning signs for Diodes you should be aware of.

But note: Diodes 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.