By selling US$123k worth of SkyWater Technology, Inc. (NASDAQ:SKYT) stock at an average sell price of US$8.02 over the last year, insiders seemed to have made the most of their holdings. The company's market worth decreased by US$60m over the past week after the stock price dropped 12%, although insiders were able to minimize their losses

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.

SkyWater Technology Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Nancy Fares, sold US$71k worth of shares at a price of US$7.97 per share. That means that even when the share price was below the current price of US$8.90, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 31% of Nancy Fares's holding.

SkyWater Technology 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!

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SkyWater Technology Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at SkyWater Technology. Specifically, Independent Director Nancy Fares ditched US$71k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does SkyWater Technology Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. SkyWater Technology insiders own 25% of the company, currently worth about US$112m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At SkyWater Technology Tell Us?

An insider sold SkyWater Technology shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To help with this, we've discovered 3 warning signs (1 is a bit concerning!) that you ought to be aware of before buying any shares in SkyWater Technology.

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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.