Allegro MicroSystems, Inc.'s (NASDAQ:ALGM) value has fallen 10% in the last week, but insiders who sold US$658k worth of stock over the last year have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of US$38.73 is still lower than the current share price.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

The Last 12 Months Of Insider Transactions At Allegro MicroSystems

Over the last year, we can see that the biggest insider sale was by the Independent Director, Joseph Martin, for US$658k worth of shares, at about US$38.73 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$27.78). So it may not shed much light on insider confidence at current levels. Joseph Martin was the only individual insider to sell over the last year.

Over the last year, we can see that insiders have bought 7.84k shares worth US$281k. But insiders sold 17.00k shares worth US$658k. 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!

I will like Allegro MicroSystems better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does Allegro MicroSystems Boast High Insider Ownership?

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. Insiders own 1.4% of Allegro MicroSystems shares, worth about US$77m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Allegro MicroSystems Insiders?

It doesn't really mean much that no insider has traded Allegro MicroSystems shares in the last quarter. Our analysis of Allegro MicroSystems insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Allegro MicroSystems. For example - Allegro MicroSystems has 1 warning sign we think you should be aware of.

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.