Despite the fact that Credo Technology Group Holding Ltd’s (NASDAQ:CRDO) value has dropped 11% in the last week insiders who sold US$14m worth of stock in the past 12 months have had less success. Given that the average selling price of US$10.00 is still lower than the current share price, insiders would probably have been better off keeping their shares.
Although we don’t think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Credo Technology Group Holding
Credo Technology Group Holding Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Co-founder, Chi Fung Cheng, sold US$14m worth of shares at a price of US$10.00 per share. That means that an insider was selling shares at slightly below the current price (US$11.89). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower 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. We note that the biggest single sale was only 10.0% of Chi Fung Cheng’s holding. Chi Fung Cheng was the only individual insider to sell shares in the last twelve months.
In the last twelve months insiders purchased 20.15k shares for US$202k. On the other hand they divested 1.39m shares, for US$14m. 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Credo Technology Group Holding insiders own about US$566m worth of shares (which is 33% 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.
So What Do The Credo Technology Group Holding Insider Transactions Indicate?
The fact that there have been no Credo Technology Group Holding insider transactions recently certainly doesn’t bother us. While we feel good about high insider ownership of Credo Technology Group Holding, we can’t say the same about the selling of shares. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Credo Technology Group Holding. You’d be interested to know, that we found 1 warning sign for Credo Technology Group Holding and we suggest you have a look.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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.
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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.
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