Insiders were net sellers of Dolby Laboratories, Inc.'s (NYSE:DLB ) stock during the past year. That is, insiders sold more stock than they bought.

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.

The Last 12 Months Of Insider Transactions At Dolby Laboratories

Over the last year, we can see that the biggest insider sale was by the Senior VP & Chief Marketing Officer, Todd Pendleton, for US$1.0m worth of shares, at about US$81.69 per share. That means that an insider was selling shares at slightly below the current price (US$83.83). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 100% of Todd Pendleton's holding. Todd Pendleton was the only individual insider to sell shares in the last twelve months.

Todd Pendleton sold a total of 13.98k shares over the year at an average price of US$82.00. 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!

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Insiders At Dolby Laboratories Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Dolby Laboratories. In total, Senior VP & Chief Marketing Officer Todd Pendleton sold US$1.0m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of Dolby Laboratories

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Dolby Laboratories insiders own about US$41m worth of shares. That equates to 0.5% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Dolby Laboratories Insider Transactions Indicate?

An insider hasn't bought Dolby Laboratories 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 since Dolby Laboratories is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 1 warning sign with Dolby Laboratories and understanding it should be part of your investment process.

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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.