We wouldn't blame Monolithic Power Systems, Inc. (NASDAQ:MPWR) shareholders if they were a little worried about the fact that Saria Tseng, the VP of Strategic Corporate Development recently netted about US$11m selling shares at an average price of US$600. However, that sale only accounted for 7.4% of their holding, so arguably it doesn't say much about their conviction.
See our latest analysis for Monolithic Power Systems
Monolithic Power Systems Insider Transactions Over The Last Year
The Founder, Michael Hsing, made the biggest insider sale in the last 12 months. That single transaction was for US$15m worth of shares at a price of US$534 each. That means that even when the share price was below the current price of US$633, an insider wanted to cash in some shares. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 2.4% of Michael Hsing's holding.
Insiders in Monolithic Power Systems 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Insider Ownership Of Monolithic Power Systems
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Monolithic Power Systems insiders own 4.5% of the company, worth about US$1.4b. 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 Do The Monolithic Power Systems Insider Transactions Indicate?
Insiders haven't bought Monolithic Power Systems stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that Monolithic Power Systems is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. While conducting our analysis, we found that Monolithic Power Systems has 2 warning signs and it would be unwise to ignore these.
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 of direct interests only, but not derivative transactions or indirect interests.
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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.