Over the past year, insiders sold US$598k worth of Allegro MicroSystems, Inc. (NASDAQ:ALGM) stock at an average price of US$28.10 per share allowing them to get the most out of their money. The company's market worth decreased by US$251m over the past week after the stock price dropped 5.5%, although insiders were able to minimize their losses

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Allegro MicroSystems

Allegro MicroSystems Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Director, Joseph Martin, for US$398k worth of shares, at about US$30.61 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$22.45. So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Joseph Martin.

Joseph Martin sold a total of 21.28k shares over the year at an average price of US$28.10. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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 winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Allegro MicroSystems

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. Allegro MicroSystems insiders own about US$97m worth of shares. That equates to 2.3% 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.

So What Do The Allegro MicroSystems Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of Allegro MicroSystems insider transactions leaves us cautious. But it's good to see that insiders own shares in the company. Of course, the future is what matters most. So if you are interested in Allegro MicroSystems, you should check out this free report on analyst forecasts for the company.

But note: Allegro MicroSystems 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, 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.