Yahoo Finance Cadence Design Systems Insiders Sell US$6.0m Of Stock, Possibly Signalling Caution
The fact that multiple Cadence Design Systems, Inc. (NASDAQ:CDNS) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.
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.
See our latest analysis for Cadence Design Systems
Cadence Design Systems Insider Transactions Over The Last Year
The Independent Director, Alberto Sangiovanni-Vincentelli, made the biggest insider sale in the last 12 months. That single transaction was for US$2.0m worth of shares at a price of US$230 each. That means that an insider was selling shares at slightly below the current price (US$253). 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 11% of Alberto Sangiovanni-Vincentelli's holding.
Insiders in Cadence Design Systems didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Cadence Design Systems insiders own 0.9% of the company, currently worth about US$636m based on the recent share price. 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 Does This Data Suggest About Cadence Design Systems Insiders?
It doesn't really mean much that no insider has traded Cadence Design Systems shares in the last quarter. While we feel good about high insider ownership of Cadence Design Systems, we can't say the same about the selling of shares. Of course, the future is what matters most. So if you are interested in Cadence Design Systems, you should check out this free report on analyst forecasts for the company.
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 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.
