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In the last year, many Marvell Technology, Inc. (NASDAQ:MRVL) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Marvell Technology
The Last 12 Months Of Insider Transactions At Marvell Technology
Over the last year, we can see that the biggest insider sale was by the President of Products & Technologies, Muhammad Hussain, for US$12m worth of shares, at about US$80.50 per share. That means that an insider was selling shares at slightly below the current price (US$118). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 16% of Muhammad Hussain's holding.
Happily, we note that in the last year insiders paid US$1.1m for 14.43k shares. But insiders sold 282.51k shares worth US$22m. In total, Marvell Technology insiders sold more than they bought 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!
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
Marvell Technology Insiders Are Selling The Stock
There was substantially more insider selling, than buying, of Marvell Technology shares over the last three months. In that time, insiders dumped US$14m worth of shares. On the other hand we note President Matthew Murphy bought US$1.0m worth of shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.
Insider Ownership Of Marvell Technology
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. Marvell Technology insiders own 0.3% of the company, currently worth about US$348m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.