Even though Avid Technology, Inc. (NASDAQ:AVID) stock gained 15% last week, insiders who sold US$2.1m worth of stock over the past year are probably better off. Selling at an average price of US$30.23, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Avid Technology

Avid Technology Insider Transactions Over The Last Year

The Chief Revenue Officer & Senior VP, Tom J. Cordiner, made the biggest insider sale in the last 12 months. That single transaction was for US$674k worth of shares at a price of US$34.54 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$27.64. So it may not tell us anything about how insiders feel about the current share price.

Insiders in Avid Technology didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

Avid Technology Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Avid Technology. In total, insiders dumped US$1.4m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Avid Technology insiders own about US$96m worth of shares. That equates to 7.7% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Avid Technology Tell Us?

Insiders haven't bought Avid Technology stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Avid Technology is growing earnings. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 4 warning signs for Avid Technology (1 shouldn't be ignored) you should be aware of.

Of course Avid Technology 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, but not derivative transactions.

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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.