We wouldn't blame PDF Solutions, Inc. (NASDAQ:PDFS) shareholders if they were a little worried about the fact that Adnan Raza, the Executive VP of Finance & CFO recently netted about US$932k selling shares at an average price of US$33.90. That diminished their holding by a very significant 97%, which arguably implies a strong desire to reallocate capital.
The Last 12 Months Of Insider Transactions At PDF Solutions
Notably, that recent sale by Adnan Raza is the biggest insider sale of PDF Solutions shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (US$35.39). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. 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 97% of Adnan Raza's stake.
PDF Solutions 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!
I will like PDF Solutions 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.
Does PDF Solutions 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's great to see that PDF Solutions insiders own 17% of the company, worth about US$231m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The PDF Solutions Insider Transactions Indicate?
Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But since PDF Solutions is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing PDF Solutions. For example - PDF Solutions has 1 warning sign we think you should be aware of.
Of course PDF Solutions may not be the best stock to buy. So you may wish to see this free collection of high quality 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.