Despite the fact that Credo Technology Group Holding Ltd (NASDAQ:CRDO) stock rose 12% last week, insiders who sold US$13m worth of stock in the previous 12 months are likely to be better off. Selling at an average price of US$17.32, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At Credo Technology Group Holding
Over the last year, we can see that the biggest insider sale was by the President, William Brennan, for US$8.8m worth of shares, at about US$17.50 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$22.31. 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. 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 13% of William Brennan's holding.
In the last year Credo Technology Group Holding insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership Of Credo Technology Group Holding
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Credo Technology Group Holding insiders own about US$565m worth of shares (which is 16% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Credo Technology Group Holding Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Credo Technology Group Holding insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Credo Technology Group Holding. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Credo Technology Group Holding.
Of course Credo Technology Group Holding may not be the best stock to buy. So you may wish to see this free collection of high quality 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.