In the last year, many Allegro MicroSystems, Inc. (NASDAQ:ALGM) insiders sold a substantial stake in the company which may have sparked shareholders' attention. 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.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Allegro MicroSystems Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Independent Director, Joseph Martin, sold US$658k worth of shares at a price of US$38.73 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$30.86. So it is hard to draw any strong conclusion from it.
Happily, we note that in the last year insiders paid US$281k for 7.84k shares. But insiders sold 25.50k shares worth US$913k. Over the last year we saw more insider selling of Allegro MicroSystems shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Allegro MicroSystems better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insiders At Allegro MicroSystems Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at Allegro MicroSystems. In total, Independent Director Richard R. Lury sold US$255k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does Allegro MicroSystems 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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Allegro MicroSystems insiders own 1.5% of the company, worth about US$91m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Allegro MicroSystems Insider Transactions Indicate?
An insider hasn't bought Allegro MicroSystems stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Allegro MicroSystems.
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.
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