Some Monolithic Power Systems, Inc. (NASDAQ:MPWR) shareholders may be a little concerned to see that the EVP of Strategic Corporate Development, Saria Tseng, recently sold a substantial US$32m worth of stock at a price of US$809 per share. That sale reduced their total holding by 19% which is hardly insignificant, but far from the worst we've seen.
Monolithic Power Systems Insider Transactions Over The Last Year
The Founder, Michael Hsing, made the biggest insider sale in the last 12 months. That single transaction was for US$34m worth of shares at a price of US$583 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$839. 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. 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. It is worth noting that this sale was only 5.1% of Michael Hsing's holding.
In the last year Monolithic Power Systems insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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Insider Ownership Of Monolithic Power Systems
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It's great to see that Monolithic Power Systems insiders own 3.8% of the company, worth about US$1.6b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Monolithic Power Systems Insider Transactions Indicate?
Insiders sold Monolithic Power Systems shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Monolithic Power Systems. At Simply Wall St, we found 2 warning signs for Monolithic Power Systems that deserve your attention before buying any shares.
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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.
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