Despite the fact that Super Micro Computer, Inc.'s (NASDAQ:SMCI) value has dropped 6.8% in the last week insiders who sold US$125k worth of stock in the past 12 months have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of US$46.26 is still lower than the current share price.

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.

Check out our latest analysis for Super Micro Computer

Super Micro Computer Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Director, Sherman Tuan, for US$125k worth of shares, at about US$46.26 per share. That means that an insider was selling shares at slightly below the current price (US$62.30). 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 9.8% of Sherman Tuan's stake. Sherman Tuan was the only individual insider to sell over the last year.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart 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.

Does Super Micro Computer Boast High 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. Super Micro Computer insiders own about US$426m worth of shares (which is 13% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Super Micro Computer Insiders?

It doesn't really mean much that no insider has traded Super Micro Computer shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Super Micro Computer insiders selling. 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. Every company has risks, and we've spotted 2 warning signs for Super Micro Computer (of which 1 is concerning!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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