We wouldn't blame Monolithic Power Systems, Inc. (NASDAQ:MPWR) shareholders if they were a little worried about the fact that Michael Hsing, the Founder recently netted about US$4.0m selling shares at an average price of US$368. However, that sale only accounted for 1.0% of their holding, so arguably it doesn't say much about their conviction.
Monolithic Power Systems Insider Transactions Over The Last Year
Notably, that recent sale by Founder Michael Hsing was not the only time they sold Monolithic Power Systems shares this year. Earlier in the year, they fetched US$184 per share in a -US$13m sale. That means that an insider was selling shares at slightly below the current price (US$387). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 4.9% of Michael Hsing's holding.
Monolithic Power Systems insiders didn't buy any shares 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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
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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Monolithic Power Systems insiders own 5.3% of the company, worth about US$933m. 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 Monolithic Power Systems Tell Us?
Insiders sold Monolithic Power Systems shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But since Monolithic Power Systems is profitable and growing, we're not too worried by this. 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. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Monolithic Power Systems. While conducting our analysis, we found that Monolithic Power Systems has 3 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, but not derivative transactions.
This article by Simply Wall St is general in nature. 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.
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