While ON Semiconductor Corporation (NASDAQ:ON) shareholders have enjoyed a good week with stock up 12%, they need remain vigilant. Even though stock prices were relatively low, insiders elected to sell US$11m worth of stock in the last year, which could indicate some expected downturn.

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.

ON Semiconductor Insider Transactions Over The Last Year

The President, Hassane El-Khoury, made the biggest insider sale in the last 12 months. That single transaction was for US$2.1m worth of shares at a price of US$105 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$68.06). So it may not shed much light on insider confidence at current levels.

Insiders in ON Semiconductor didn't buy any shares in the last year. 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does ON Semiconductor 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. ON Semiconductor insiders own about US$100m worth of shares. That equates to 0.3% of the company. 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 ON Semiconductor Tell Us?

The fact that there have been no ON Semiconductor insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by ON Semiconductor insiders. The modest level of insider ownership is, at least, some comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with ON Semiconductor and understanding it should be part of your investment process.

But note: ON Semiconductor 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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